A book review from an interesting site:
Manias, Panics and Crashes
- A History of Financial Crises
By Charles P. Kindleberger
Published by John Wiley & Sons
ISBN 0-471-16171-3
263 pages
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>>> ...The interesting thing about all the crashes he surveys is, as he himself notes, the old French adage "plus ca change, plus c'est la meme chose." The capacity of people to repeat their previous mistakes with remarkable accuracy and regularity seems to be ominously clear throughout the author's analysis.
One thing that is intriguing is how even the most intelligent of people can be drawn into losing money in financial panics. Kindleberger relates the story of Britain's most famous astronomer and Master of the Royal Mint, Sir Isaac Newton. Newton exited South Sea stock early in the bubble with a GBP 7,000 profit. (I don't have an inflation table to hand, but this is serious money in modern terms by any estimation!) As the bubble inflated, Newton jumped back in again some time later and held on over the peak and into the significant decline to manage a net loss of GBP 20,000. Afterwards, reports Kindelberger, a rueful Newton reported: "I can calculate the motions of heavenly bodies but not the madness of people." ...<<< |
