Brains Make Bad Investors

07 October 2001
Posted by Chris Smith.

Brains aren't everything. According to research by Barclays Global Investors, the higher your IQ, the more likely you are to be a bad investor. Intelligent people have trouble being disciplined in the way they stash their cash. But if your portfolio is looking bad, then take heart - you're in good company. Sir Isaac Newton, the man who discovered the laws of gravity whilst watching apples fall from a tree, was a keen, but unsuccessful stock market punter. He managed to lose the equivalent of £1.5 million pounds, investing in South Seas ventures (the 18th century equivalent of dot com companies) just before the bubble burst. Newton said "I can measure the motions of bodies, but I cannot measure human folly".

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