After the war, Keynes speculated heavily in currencies, but lost most of his capital in 1920 when several European currencies he was betting against recovered. Undaunted, he broadened his portfolio to commodities and eventually common stocks, which at the time was a rarity for institutional investors, who preferred safe bonds and real estate.

Although he was building wealth for his own account and the institutional funds throughout the 1920s, he did not see the 1929 debacle coming and was almost cleaned out again.

The 1929 crash and resulting Great Depression left Keynes intellectually shellshocked, so he changed his strategy. Professor Chambers and Professor Dimson discovered that sometime in the early 1930s he backed away from short-term trades and commodities and focused on stocks. No longer would he pay attention to overarching economic theories or short-term sentiment: The “animal spirits” of the market’s unpredictable pixies could not be trusted. He sensed that security prices were not true indicators of company values.

”Keynes anticipated Eugene Fama, the 2013 Nobel Economics Prize co-winner, in that he clearly did not believe that stock prices must be good indicators of fundamental value,” Professor Chambers said in a recent email. “Consequently, there could be periods when the irrational behavior of investors and what he called animal spirits play a significant role in determining prices on both the upside and downside.”

Unlike millions of modern investors, who latch onto every headline and interview on business television shows to gauge market sentiment, Keynes went about-face in the early to mid-1930s to concentrate on a company’s “enterprise” value, which is also known as “book” or “breakup” value. This intrinsic view of a company’s true worth stripped out the overly emotional component that is often reflected in stock prices. As a result, he often picked companies that had promising futures, but were unloved at the time.

When Keynes adopted his new investment strategy — which paralleled work by Benjamin Graham, a Columbia University professor and mentor to Mr. Buffett — he did quite well. Even with setbacks in 1929-30, 1937-38 and the early years of World War II, Keynes managed a 16 percent annualized return in the Cambridge discretionary portfolio, which mirrored his other holdings. That compares with 10.4 percent for a basket of British stocks over the same period, Professor Chambers and Professor Dimson found.

More important, Keynes staged some striking rebounds after two major declines from 1929 to 1940. According to Professor Chambers and Professor Dimson, although his Cambridge discretionary portfolio lagged the British market by a cumulative 12 percent in 1930 from inception, his performance rallied in the 1930s and ’40s and posted a 0.73 risk/return or Sharpe ratio during his tenure, compared with 0.49 for the British market.