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Reported to have had relationships with other men in his younger days (and to have engaged in orgies involving both men and women during his professional life, according to letters by Lytton Strachey), in mid-life Keynes enjoyed a happy marriage with the famous ballerina Lydia Lopokova. Keynes was a prominent member of the Bloomsbury group. He was ultimately a successful investor building up a substantial private fortune. He enjoyed collecting books and for example collected and protected during his lifetime many of Isaac Newton's papers. Keynes died of cardiac infarction, his heart problems being aggravated by the strain of working on post-war international financial problems.
His brother Sir Geoffrey Keynes ( 1887- 1982) was a distinguished surgeon, scholar and bibliophile, and his nephews Richard Keynes (born 1919) physiologist, Quentin Keynes ( 1921- 2003) an adventurer and bibliophile.
Keynes' brilliant record as an investor is demonstrated by the publicly available data of a fund he managed on behalf of King's College, Cambridge.
From 1928 to 1945, despite taking a massive hit during the Crash of 1929, Keynes' fund produced a very strong average increase of 13.2% compared with the general market in the United Kingdom declining by an average 0.5% per annum.
The approach generally adopted by Keynes with his investments he summarised accordingly:
In an approach reminiscent of one of his followers billionaire investor Warren Buffett today, Keynes argued that "It is a mistake to think one limits one's risks by spreading too much between enterprises about which one knows little and has no reason for special confidence ... One's knowledge and experience are definitely limited and there are seldom more than two or three enterprises at any given time in which I personally feel myself to put full confidence."
Keynes' advice on speculation, some might say, is timeless and ought to have been heeded by day-traders trying to prove themselves smarter than everyone else:
Keynes when reviewing an important early work on equities investments argued that "Well-managed industrial companies do not, as a rule, distribute to the shareholders the whole of their earned profits. In good years, if not in all years, they retain a part of their profits and put them back in the business. Thus there is an element of compound interest operating in favor of a sound industrial investment."
Buffett seized upon this analysis in his own investment thinking. It is the reason, he argued, why equities in the long run out-perform bonds because some of the "interest" is retained by the company and that produces more "interest". It therefore compounds. These simple philosophies helped build a fortune for Keynes and a vast investment empire for Buffett.
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