It Turns Out John Maynard Keynes Was Also A Good Money Manager
Feb 12, 2014, 21:19 IST
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His academic work has become essentially synonymous with ever major spending program, from the New Deal to the post-financial crisis stimulus plan.
But as the New York Times' John Wasik writes, it turns out Keynes was something of a money manager too (for himself, friends, two British insurance companies, and more).
"What I found was that Keynes stumbled several times before he succeeded - he was almost financially wiped out three separate times - but he got back in the game and altered his thinking to build wealth long term," Wasik writes. From the New York Times:
After the war, Keynes speculated heavily in currencies, but lost most of his capital in 1920 when several European currencies he was betting against recovered. Undaunted, he broadened his portfolio to commodities and eventually common stocks, which at the time was a rarity for institutional investors, who preferred safe bonds and real estate. Keynes was riding the wave, but he didn't see 1929 coming and almost got completely cleaned out. He changed up his strategy and started focusing on management at different companies: ...Keynes went about-face in the early to mid-1930s to concentrate on a company's "enterprise" value, which is also known as "book" or "breakup" value. This intrinsic view of a company's true worth stripped out the overly emotional component that is often reflected in stock prices. As a result, he often picked companies that had promising futures, but were unloved at the time. As a result, Keynes died as one of the richest economists ever. In 2013 dollars, he was worth more than $30 million. Read the full report at the New York Times »