Blogs & Comment

7 investing experiences

Karl Marx a day trader?Isaac Newtona flop as an investor? Benjamin Disraeli a promoter ofColumbian, Mexican and Canadian mining stocks?Mark Twain a stock-market columnist?Yes, it’s alltrue. Read theirs’ and 3 other’s stories, below.
1. Karl Marx, co-author of the Communist Manifesto, was a bit of a day trader, it appears. In an 1864 letter , he writes:
I have, which will surprise you not a little, been speculating partly in American funds, but more especially in English stocks, which are springing up like mushrooms this year (in furtherance of every imaginable and unimaginable joint stock enterprise), are forced up to quite an unreasonable level and then, for the most part, collapse. In this way, I have made over 400 and, now that the complexity of the political situation affords greater scope, I shall begin all over again. Its a type of operation that makes demands on ones time, and its worth while running some risk in order to relieve the enemy of his money.
2. After losing a bundle when the South Sea Bubble burst in 1720, Sir Isaac Newton, exclaims:
I can calculate the motions of the heavily bodies, but not the madness of people.
3. In Thomas Hardys The Life and Death of the Mayor of Casterbridge, the fictional character, Donald Farfrae, explains excitedly to Lucetta how he made his fortune in commodity speculation with short-term trading and small profits repeatedly taken.
Yet Ive done very well this year. O yes, he went on with ingenuous enthusiasm. You see that man with the drab kerseymere coat? I bought largely of him in the autumn when wheat was down, and then afterwards when it rose a little I sold off all I had! It brought only a small profit to me; while the farmers kept theirs, expecting higher figures yes, though the rats were gnawing the ricks hollow. Just when I sold the markets went lower, and I bought up the corn of those who had been holding back at less price than my first purchases. And then, cried Farfrae impetuously, his face alight, I sold it a few weeks after, when it happened to go up again! And so, by contenting myself with small profits frequently repeated, I soon made five hundred poundsyes! (bringing down his hand upon the table, and quite forgetting where he was)while the others by keeping theirs in hand made nothing at all!
4. Before he wrote Vivian Greyand became Prime Minister of Great Britain, Benjamin Disraeli sought his fortune (unsuccessfully) in the 1820s as a pamphleteer for promoters of Columbian, Mexican and Canadian mining stocks. Here is what he wrote about one mining stock (in which he himself had a large leveraged positioned):
When I tell you that one single mine which everyone in this kingdom believes to be inundated is producing at the rate of 3,000 pounds net profit per week and that at the end of the first year of working it will give us a net profit at the least of 150,000 pounds, when I tell you moreover that this mine contains veins of immense and incalculable worth, which have only been discovered by our own surveyors and that it is their opinion that it alone may yield 100 per cent for our money, when I tell you I have seen the weekly accounts of profits and loss and every paper and memorandum connected with its management, when I tell you that all our agents are writing home to us to buy them additional, no matter at what price. Can you call me too sanguine?
5. Prior to writing The Adventures of Tom Sawyerin 1876, Mark Twain speculated in U.S. mining stocks and accepted stock from companies for newspaper articles on promising strikes or likely dividends, only to end up disillusioned:
“October. This is one of the peculiarly dangerous months to speculate in stocks. The others are July, January, September, April, November, May, March, June, December, August, and February.
6. Jonathon Swift had a ringside seat to the South Sea Bubble in 1720 and after the collapse, wrote a rant called The Bubble, and these words about the greed of the promoters:
Get money, money still And then let virtue follow, if she will.
7. In Villainy of stock-jobbers detected(1701), the author of Robinson Crusoe, Daniel Defoe, blasts stockbrokers and underwiters:
“These People can ruin Men silently .’tis a compleat System of Knavery a Trade found in Fraud, born of Deceit, and nourished by Trick, Cheat, Wheedle, Forgeries, Falshoods, and all sorts of Delusions .”