The Story of Money podcast, hosted by Financial Times columnist Gillian Tett and Alphaville editor Robin Wigglesworth, examines whether intellectual brilliance translates to investment success. They're joined by FT reporter Toby Nangel, who analyzed the trading records of history's greatest minds.

The episode explores the investment performance of figures like Sir Isaac Newton, Winston Churchill, Charles Darwin, J.M.W. Turner, and John Maynard Keynes. Drawing from Winston Churchill's Financial Affairs by David Lau and 1929 by Andrew Ross Hawkins, the discussion reveals how even genius-level intellect often falls victim to market psychology and emotional trading decisions.

Isaac Newton's South Sea Bubble Disaster

Newton accumulated £20,000 in South Sea Company shares by 1720, worth approximately £300 million today, and brilliantly cashed out near the peak with over 100% returns.

Despite his famous quote 'I calculate the movement of stars, but not the madness of men,' Newton jumped back into the bubble at its absolute peak, liquidating all his government bonds and cash.

Within a year of re-entering the market, Newton lost 40% of his fortune, demonstrating how even scientific genius succumbs to FOMO and market timing failures.

Churchill's Catastrophic American Trading Spree

Winston Churchill's Financial Affairs by David Lau reveals Churchill earned £750 per article in the 1920s, equivalent to £200,000-£480,000 today depending on the adjustment method used.

During a four-month American book tour, Churchill discovered margin trading and became obsessed with America's 'go-getting, risk-taking spirit,' criticizing Britain for being 'timid and passive.'

Churchill lost his entire £7 million book advance through frenzied trading, with nine days ending October 18th seeing £80 million worth of stock transactions that wiped him out completely.

As described in 1929 by Andrew Ross Hawkins, Churchill fell in love with American risk-taking culture, but his 'citadelian' trading turnover ultimately destroyed his wealth.

Darwin's Methodical Investment Success

Charles Darwin achieved 8.6% annual real returns over 42 years through careful asset allocation, riding the railway boom before switching to government bonds in the mid-1860s.

Darwin's portfolio flip to government bonds perfectly timed the avoidance of the 1873 financial crisis, which wiped out many railway investments.

While Darwin's returns appear exceptional, the analysis cannot fully separate his investment skill from the substantial inheritances he received throughout his career.

Turner's Fixed Income Arbitrage Genius

J.M.W. Turner exploited a 340 basis point arbitrage opportunity in 1829 government debt exchanges, making millions by delivering long annuity bonds into dated bond swaps.

Contemporary John Constable described Turner as 'uncouth but has a wonderful range of mind,' while Sir Walter Scott noted his 'itchy palm' and willingness to 'do anything for cash.'

Turner's arbitrage was considered 'uncouth' by gentlemen of the era, but he executed £10,000 of trades despite potential social reproach from his artistic contemporaries.

Keynes' Evolution from Day Trader to Value Investor

John Maynard Keynes outperformed UK stocks by 5.2% annually for five years as King's College bursar, compared to Warren Buffett's 1.4% S&P outperformance over 25 years.

Keynes transformed his investment style from high-frequency trading with six-month holding periods to patient value investing with seven-year holding periods.

Keynes famously stated: 'As time goes on, I get more and more convinced that the right method in investing is to put fairly large sums into enterprises which one thinks one knows something about.'

His early career included significant losses in the 1920s, but his ability to adapt and learn from mistakes became his greatest investment strength.

The Limits of Intellectual Brilliance in Markets

High IQ enables fundamental analysis and arbitrage identification, but fails to account for market psychology and the 'madness of crowds' that drives momentum.

Successful investing requires both analytical skills and emotional discipline - the ability to resist FOMO while taking calculated risks without excessive speculation.

Historical patterns show the same mistakes recurring across centuries: timing the market, overleveraging, and emotional decision-making affect even the most brilliant minds.