Conclusions
Keynes was exceptionally gifted as a trader, not in terms of the gains he made in the stock exchange—which, as has now been proved, were not as large as commonly believed— but by virtue of his deep grasp of the fundamentals underlying price trends.
He showed great ability in gauging the direction of prices, although he did not always get the timing right. He never ceased to gather information on the underlying forces driving prices, and remained first and foremost an economist who based his trading decisions on his professional knowledge.As far as tin was concerned, he put his investment philosophy into practice. Having acquired a deep knowledge of that market through speculation in derivatives, he applied it to understanding the working of the tin companies, a highly concentrated industry in the hands of a few people in total control—people Keynes was acquainted with and whose ability as managers he trusted.
In the later stage of Keynes's thinking, he became more and more concerned about the role of market sentiment, conventions and herd behavior. While he granted that success of the speculator might rest on the ability to interpret market sentiment, this was never the guiding principle for Keynes's behavior as investor. Rather he trusted informed opinion on relevant data and, above all, individual judgment as opposed to the average market view.
“My central principle of investment”—he explained in 1944 to a banker who was critical of his suggestions about how to manage Eton's finances—“is to go contrary to general opinion, on the ground that, if everyone is agreed about its merits, the investment is inevitably too dear and therefore unattractive” (Keynes, 1940, 111).