As I wrote this for you folks last week, my part of the country was bracing for Winter Storm Juno, a blizzard that could bring wind gusts of 65 miles per hour while dumping as much as three feet of snow on some of the biggest cities in the Northeast. (We were spared its brunt, but New England could claim no such good fortune).
With the early warning systems we have today – giving us the ability to prepare – the human toll from Juno was held to a minimum.
But the proliferation of headlines made me think of another winter storm – one that took place 169 years ago…
And as an investor, it's one that clearly teaches a valuable lesson.
An American Legend and an Important Example
Unlike Juno, this storm had no name.
But it does have an identity – an infamy – because of a deadly aftermath that's made it an Old West legend.
I'm talking about the Donner Party tragedy of 1846-1847.
And I'm telling you about it today because the sort of mistakes that led to the deaths of 39 settlers – and even induced some snowbound party members to resort to cannibalism – can be just as deadly to your investments.
Let me show you what I mean. And let's start with a look at the Donner Party tragedy.
The core of the 87-member Donner Party (sometimes called the Donner-Reed Party) came from three fairly well-to-do families from Springfield, Ill. There was George Donner, his brother Jacob, and James F. Reed. Each man brought along his wife, children, and employees. And each had three Conestoga-style wagons.
Some of their neighbors were surprised by the Donner and Reed families' decisions to venture west. After all, as I said, these families were all very well off. Reed owned a mill and a furniture-making business. For his wife, Margaret, Reed had constructed and outfitted a luxurious (for the time) wagon known as the "Pioneer Palace Car." The interior was reportedly akin to a standard living room of the era.
About the Author
Before he moved into the investment-research business in 2005, William (Bill) Patalon III spent 22 years as an award-winning financial reporter, columnist, and editor. Today he is the Executive Editor and Senior Research Analyst for Money Morning. With his latest project, Private Briefing, Bill takes you "behind the scenes" of his established investment news website for a closer look at the action. Members get all the expert analysis and exclusive scoops he can't publish... and some of the most valuable picks that turn up in Bill's closed-door sessions with editors and experts.