Isaac Newton was a genius, but even he lost millions in the stock market

Isaac Newton was one of the smartest peopleto ever live.But there's a big difference between being a smart physicist and smart investor.And, unfortunately for him, Newton learned that the hard way.In an updated and annotated textof Benjamin Graham's classic "The Intelligent Investor," WSJ's Jason Zweig included a small anecdote about Newton's adventures with investing the South Sea Company:"Back in the spring of 1720, Sir Isaac Newton owned shares in the South Sea Company, the hottest stock in England. Sensing that the market was getting out of hand, the great physicist muttered that he 'could calculate the motions of the heavenly bodies, but not the madness of the people.' Newton dumped his South Sea shares, pocketing a 100% profit totaling7,000. But just months later, swept up in the wild enthusiasm of the market, Newton jumped back in at a much higher priceand lost20,000 (or more than $3 million in [2002-2003's] money. For the rest of his life, he forbade anyone to speak the words 'South Sea' in his presence."Here's a look at how South Seas moved back then.Newton obviously wasn't a dumb person.He invented calculus and conceptualized his three laws of motion.But this little episode shows that he wasn't a smart investor because he let his emotions get the best of him, and got swayed by the irrationality of the crowd.Or as Graham described it: "For indeed,the investor's chief problemand even his worst enemyis likely to be himself."Check out "The Intelligent Investor" here.SEE ALSO:The famous last words of 18 famous peopleJoin the conversation about this storyNOW WATCH: The next Powerball will have the biggest jackpot ever ' but you shouldn't buy a ticket
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