Isaac Newton Lost 80% of His Fortune in a Bubble -- What That Teaches Every Investor (SB1856)

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Isaac Newton was one of the smartest humans who ever lived. He also bought into the South Sea Bubble, sold for a profit, watched it keep climbing, bought back in out of pure FOMO, and rode it all the way down to an 80% loss that haunted him until he died. Ben Carlson, co-host of the Animal Spirits podcast and one of the sharpest minds at Ritholtz Wealth Management, joins Joe and Anna to walk through centuries of market history -- bubbles, crashes, and the psychology that makes smart people do dumb things with money. Anna also helps a Stacker named Louie untangle his 401(k) sources and figure out whether it's finally time to bring in a professional.

What You'll Walk Away With

• Why Isaac Newton's South Sea Bubble loss still ranks among history's most instructive investing failures -- and why it had nothing to do with intelligence
• Ben's framework for why risk means something completely different depending on where you are in your life cycle -- and why a market crash genuinely doesn't matter the same way to a 25-year-old and a 55-year-old
• The wrong lesson an entire generation learned from 2008 -- and why everyone preparing for the last crisis missed the next seventeen years of bull market
• Why Japan's three-decade stock market bubble is the best real-world case for diversification -- and why it doesn't translate as cleanly to the US as people assume
• The behavioral reason complex investment strategies are easy to sell and nearly impossible to hold through a downturn -- while simple strategies survive the pain
• Why Ben's firm discovered that the hardest financial transition isn't saving for retirement -- it's actually learning to spend the money once you get there
• The Beanie Babies divorce court story that perfectly captures what every bubble looks like from the outside
• Anna and OG's take on Louie's four-source 401(k): why it's simpler to manage than it looks, and why "move everything to Roth" is the wrong instinct for most DIY investors
• The Roth conversion icing-on-the-cake strategy: how to use pre-tax and Roth buckets together to manage your tax bracket year by year in retirement
• Why one financial pro has a surprisingly negative take on HSAs at death -- and the timing problem that makes spending one down in retirement genuinely tricky

Why This Matters Now

Every market cycle feels unprecedented while you're living through it. Understanding the actual constant -- human psychology, not headlines -- is the difference between riding out volatility and becoming a cautionary tale, smart as you might be.

From the Basement

Ben Carlson joins Joe and Anna to walk through centuries of bubbles, crashes, and the psychological wiring that makes both geniuses and ordinary investors do the same dumb things. Doug arrives with Statue of Liberty trivia tied to America's upcoming 250th anniversary. A Stacker calling himself Louie -- and getting Anna instead of OG, much to his surprise -- asks for help simplifying his 401(k) and figuring out his Roth conversion strategy, and gets a reminder that he's already doing better than he thinks.

Resources Mentioned

• Risk and Reward: How to Handle Market Volatility and Build Long-Term Wealth by Ben Carlson -- available wherever books are sold
• Animal Spirits podcast -- Ben Carlson and Michael Batnick; available wherever you listen to podcasts
• Ritholtz Wealth Management -- referenced for prior guests Barry Ritholtz, Josh Brown, and Nick Maggiulli
• Where Are the Customers' Yachts? by Fred Schwed -- referenced for the famous quote on the emotional experience of losing money
• Paul Merriman's research on asset allocation -- paulmerriman.com
• Stacking Benjamins Vault -- stackingbenjamins.com/vault
• Stacking Benjamins Newsletter (The 201) -- stackingbenjamins.com/201
• Stacking Benjamins voicemail line -- stackingbenjamins.com/yelldownstairs
• Stacking Benjamins Community -- stackingbenjamins.com/basement

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