

Every investor believes they’re too smart to fall for a fad. We tell ourselves we’ll be disciplined, analytical, and patient. But history–and human nature–tell a different story. Take Isaac Newton, one of the greatest minds in history. By his mid-twenties, he had invented calculus, defined the laws of motion, and rewritten our understanding of the universe. Yet even Newton wasn’t immune to the emotional pull of markets. In 1720, Newton invested in a company called the South Sea Company–a British venture that promised to open new trading routes with Spain’s colonies. The story sounded irresistible: government backing, exclusive rights, and the promise of enormous profits. Newton bought in early, made a tidy gain, and sold at a nice profit. But when the price kept climbing, he couldn’t resist the excitement. He bought back in–this time, with nearly his entire fortune. For a few months, he looked brilliant. The stock kept climbing, driven not by profits, but by speculation. Then, almost overnight, it collapsed. The bubble burst, and Newton lost nearly everything. He later said, “I can calculate the movement of the heavenly bodies, but not