[MUSIC PLAYING] Turning to his currencies, his performance was much more chequered. Again, overall, he made money, but he really had to endure periods of time, most notably in 1920, where he lost an awful lot of money. This performance I’m talking about is the performance for himself for his own personal portfolio.
He was not trading currencies for his college in the 1920s when he was trading for himself. He did trade currencies for his college in the 1930s, I think, when he felt he was on more certain ground, as well as trading currencies for himself in the ’30s. So overall, we can get a better picture for his currency trading performance by looking at what he did on his own account, his personal account.
So in 1920, he lost a huge amount of money in May 1920 because his positions went wrong. And it’s thought he was on the verge of personal bankruptcy. However, what did he do? If it had been you or I, we would have quit trading and gone back to our day job. He went out and borrowed some money from an aristocratic friend of his, and actually invested that money in the very same positions, the same trades. By the end of the year, he’d recovered his losses. And throughout the rest of the 1920s up to 1927, he overall made money. Then, again, in the 1930s, he initially lost money for the first three years before he finally made money. And overall, he made money.
So you can tell from that description that whilst overall he made a positive return, his returns were extremely volatile. And that the great difficulty– and again, he wrote about this later on in the 1930s. The great difficulty he faced when he was trading currencies is that directionally, he had skill in forecasting the direction of a currency correctly, but he had great difficulty in judging the timing of when to jump into either buying or selling a currency. And so very often, he was too early. And that meant he had to endure losses before he was able to make big profits. And that is a problem which modern currency traders also would confront.