Saturday, March 8, 2014

Should you invest in stocks in times of war?

The year was 1815 and the financier Nathan Mayer Rothschild had seen it before. He knew exactly how the markets would react, now another battle in the Napoleonic wars was getting closer.

With the use of the most highly advanced communication technologies of the times - stagecoaches , semaphores and pigeons - he earned enormous amounts of money from its headquarters in London from speculating in the war, and his investment advice to other investors sounded calculating, cynical:

"Buy when the cannons thunder - sell when the trumpets sound".