ABSTRACT
This chapter connects Keynes’s investment behavior in the stock exchange with his general views of choice in a context of uncertainty, characterized by limited knowledge, where his particular notions of probability and rationality apply. Keynes had heavily speculated in the non-ferrous future and option markets, mainly in the 1920s, although he continued more sporadically throughout the 1930s, gathering knowledge of the sector. Keynes tried some sporadic dealings in US companies between 1911 and 1913 and then again from 1925 to 1928. Keynes’s initial large investments in the oil sector might also have reflected the policy of the US government since 1934. In the General Theory, Keynes distinguishes between two ways of acting in the stock exchange: “the activity of forecasting the prospective yield of assets over their whole life”; and “the activity of forecasting the psychology of the market”.
