Warren Buffett Lost $1.3 Billion On The Dexter Shoe Company
Perhaps the world’s most famous investor, Warren Buffett’s preternatural gift for spotting golden investment opportunities has earned him the moniker ‘The Oracle of Omaha” and made him one of the ten richest men on the planet. The investor attributes his success to his ability to read a company’s balance sheet like a book, but even titans stumble, as Buffett perfectly illustrated by sinking $433 million into the doomed Dexter Shoe Company. By Buffett’s own estimates, the disastrous investment cost shareholders of Berkshire Hathaway – the firm that Buffett heads up – around $1.3 billion, and he described it in a letter as “the worst deal” he’s ever made.
Mark Twain Bet The Equivalent Of $8.5 Million On A Typewriter
Mark Twain seemingly had two talents: writing timeless novels, and squandering fortunes. Despite earning vast sums as a writer and highly sought-after lecturer, Twain consistently blew his life savings on harebrained schemes and investment opportunities. In the early 1800s, the novelist invested over $300,000 (over $8.5 million in today’s money) into the Paige Compositor, an extraordinarily complex typesetting device that had over 18,000 parts. Unfortunately for Twain, the machine’s inventor, James Paige, only ever manufactured a handful of his machines and soon went bankrupt, as did the hapless author.
Jeff Bezos Blew $50 Million On Pets.com
Jeff Bezos might have leveraged the power of the internet to become one of the wealthiest men on the planet, but that doesn’t mean that all of his online ventures have performed well. In 1999, Amazon, which at this point was just starting to diversify its products to include more than just books, invested $50 million into the newly established Pets.com. Unfortunately, as with many companies of the dot-com boom and bust, Pets.com proved to be a resounding failure and went into liquidation scarcely a year after taking Bezos’ cash.
Bill Ackman Lost $1 Billion After Shorting Herbalife
In 2012, billionaire investor Bill Ackman publicly announced that his hedge fund was actively shorting Herbalife, a company that peddles a wide variety of dietary supplements. After intensely scrutinising the company, Ackman concluded that Herbalife amounted to little more than a “pyramid scheme” and predicted that its stock price would eventually plummet to zero. Unfortunately for the financier, Herbalife stock has continued to go from strength to strength, despite a number of other high-profile financial commentators echoing his sentiments, and in 2017 Ackman was forced to abandon his position after losing over $1 billion.
Kim Basinger Lost $19 Million On A Town In Georgia
In 1989, Kim Basinger proved that poor investments aren’t solely the preserve of financial experts. The critically acclaimed actress and model purchased the town of Braselton, Georgia for an eye-watering $20 million, with the intention of turning it into a tourism hotspot. However, Basinger’s financial fortunes went south shortly after purchasing the town, leaving her without the funds to invest in her new project. Less than five years later, the actress sold Braselton for a measly $1 million.
Elon Musk Lost Billions On Twitter
Not long after cementing his status as the world’s richest man (his crown has since been taken by Bernard Arnault), Elon Musk spent a large portion of his fortune – $44 billion, to be precise – purchasing Twitter. Musk had been intensely critical of what he described as Twitter’s policy of censorship, exemplified by the banning of then-President Donald Trump, and he vowed to turn the platform into a “digital town square.” Despite his bravado, Musk attempted to renege on the deal, but was strong-armed into completion with the threat of legal action by Twitter. Musk’s tenure at the company has been marred by relentless controversy, causing countless advertisers to flee from the platform and send the company’s revenue tumbling.
Carl Icahn Lost Billions When Blockbuster Collapsed
For over 15 years, Blockbuster’s position as the champion of video rental services seemed unassailable. As a result, Wall Street traders – including activist investor Carl Icahn – saw it as one of the safest bets on the market. Icahn bought almost ten million shares in the company, a decision he came to sorely regret, largely thanks to the efforts of Marc Randolph, the founder of Netflix. Management at Blockbuster were slow to react to the threat, viewing Netflix as a minor player that would never be able to compete with the sheer number of bricks-and-mortar stores that Blockbuster operated. However, Netflix completely revolutionised the industry, and Blockbuster’s attempts to pivot to a monthly subscription service came too late, with the company declaring bankruptcy in 2010.
Sean Quinn Almost Singlehandedly Crashed The Irish Economy
Diversification is the practice of owning a varied portfolio of stocks to reduce the risk of getting wiped out by a single market collapsing, and Sean Quinn, at one point Ireland’s richest man, makes a great cautionary tale about its importance. Quinn made himself obscenely rich by investing in Anglo Irish Bank using a type of derivative known as a difference of contract. In 2008, the subprime mortgage market disintegrated spectacularly, sending convulsions through the global economy that shredded Anglo Irish Bank and wiped out Quinn’s entire investment portfolio.
Microsoft Lost Billions On Windows Phones
The rivalry between Apple and Microsoft is legendary, with the companies constantly jousting for the position of the world’s most innovative – and lucrative – consumer tech brand. After Apple released the iPhone, they seemed to be pulling ahead in the competition. Seeking an answer, Microsoft purchased mobile-phone giant Nokia for £7.2 billion, with the price tag eventually swelling to over $8 billion once restructuring costs were factored in. Unfortunately for Microsoft, the line of Windows-based Nokia smartphones that came out of the acquisition were poorly received, and the company was eventually forced to abandon the project.
Barbara Corcoran Lost Her Life Savings On ‘Video House Viewings’
Whilst the amount of money lost on this one pales into insignificance compared to some of the entries on this list, at the time it was a stinging blow for Barbara Corcoran. After a string of failed jobs and business ventures, Corcoran – who would go on to become a member of investment show Shark Tank – found success in real estate. After her company made its first sizeable profit, the businesswoman invested $71,000 of her own money having all of her properties videotaped, which she thought would revolutionise real estate marketing. Each listing was presented by its respective agent, and Corcoran had overlooked one detail: no real estate agent was willing to give prospective clients a tape that included other properties presented by other agents.