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What if intelligence alone wasn’t enough to make someone a successful investor?
What if one of the smartest men who ever lived could still make a catastrophic investing mistake?
That is not a hypothetical.
That is the story of Isaac Newton.
Newton was not just intelligent. He was transcendent.
He gave us calculus.
He unlocked gravity.
He reshaped physics, mathematics, and astronomy.
And yet, when it came to investing, he made one of the most famous financial mistakes in history.
During the South Sea Bubble of the early 1700s, Newton initially did something wise. He invested early and sold at a profit.
Disciplined. Rational. Calm.
But then prices kept rising.
The frenzy intensified. Everyone around him was getting rich (or so it appeared).
So Newton bought back in… near the top.
When the bubble collapsed, he lost the equivalent of millions of dollars in today’s money.
His famous reflection afterward:
“I can calculate the motion of the heavenly bodies, but not the madness of people.”
That quote has survived for centuries because it captures something timeless about investing psychology.
Markets are not driven solely by logic. They are driven by human emotion.
And even brilliant people are not immune.
Newton’s mistake was not a lack of intelligence.
It was overconfidence outside his circle of competence.
Warren Buffett has often said: “Risk comes from not knowing what you’re doing.”
Charlie Munger made a similar point: “It’s not supposed to be easy. Anyone who finds it easy is stupid.”
Newton did not lack intellectual ability.
What he lacked was:
In other words, he stepped outside his expertise.
That still happens every day.
Many investors we meet remind me of Newton.
They are exceptional people.
Highly accomplished physicians and dentists.
IT professionals.
Attorneys.
Engineers.
Business owners and executives.
They operate at the top of their professions.
But success in one field does not automatically translate into expertise in investing, especially in private commercial real estate.
That is not criticism. It is simply reality.
The truth is that institutional-quality due diligence requires:
Most high-performing professionals already have a demanding full-time career.
They do not necessarily have the bandwidth to become full-time investment analysts as well.
At Wellings Capital, we have reviewed thousands of real estate deals and operators over the years. Last year, we reviewed 1,137 operators and deals. We only invested in six. Less than 1%.
One surprising lesson is this:
It does not get easier.
It gets harder.
The more you learn, the more you realize how much can go wrong.
Howard Marks of Oaktree Capital Management said it well: “You can’t predict. You can prepare.”
Real preparation requires:
This is not a casual side hobby.
It is a full-time discipline.
Newton was not investing in isolation.
He was caught in a wave of greed, fear, envy, and speculation.
Human nature has not changed since then.
Markets still swing between extremes.
Buffett famously said: “Be fearful when others are greedy and greedy when others are fearful.”
That sounds simple.
In practice, it is incredibly difficult.
When everyone around you is making money, caution feels foolish.
And when markets are falling apart, discipline feels terrifying.
Newton experienced that pressure firsthand.
Modern investors do, too.
One of the most important lessons in investing is this:
You do not need to be an expert at everything.
In fact, trying to be can become dangerous.
Buffett calls this staying within your “circle of competence.”
The goal is not to know everything.
The goal is to:
That mindset matters enormously in private real estate investing.
This same principle applies to portfolio construction.
Imagine two investors:
Investor A
Investor B
Over long periods of time, Investor B often comes out ahead. (Email me if you want to see the math.)
Why?
Because avoiding large losses matters more than maximizing upside on every deal.
That is a very Buffett-like principle: “Rule No. 1: Never lose money. Rule No. 2: Never forget Rule No. 1.”
Newton mastered the laws of the universe.
But he could not master the psychology of markets.
Very few people can.
That is why wise investors rarely go it alone.
They build systems.
They build relationships.
They build discipline.
And most importantly, they understand where their expertise ends.
If you are a high-performing professional considering private real estate investing, success may not come from becoming the expert yourself.
It may come from choosing the right partners and investment structures to help protect and compound your capital over time.
Written by
Paul Moore is the Founder of Wellings Capital. After graduating with an engineering degree and
an MBA, Paul entered the management development track at Ford Motor Co. He later scaled and
sold a staffing firm to a public co. in 1997. Paul began investing in real estate in 1999 to protect
and grow his own wealth.
He completed over 100 real estate investments, appeared on HGTV’s House Hunters, and
developed a subdivision. After completing three commercial developments, Paul narrowed his
focus to commercial real estate in 2011. Paul is married with four children and lives in Central
Virginia.
Press: Paul was 2x Finalist for Ernst & Young’s Michigan Entrepreneur and has contributed to
BiggerPockets and Fox Business. He is the author of two real estate books: The Perfect
Investment and Storing Up Profits. Paul co-hosted a wealth-building podcast called How to Lose
Money and he’s been a featured guest on 300+ other podcasts including the BiggerPockets
Podcast, The Real Estate Guys, and Entrepreneur on Fire.
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