These expensive lessons happened to top investors, and each one is worth studying carefully. After all, this kind of billion-dollar mistake is not common, but the mistakes behind it often happen to us.

how does it feel to lose hundreds of millions of dollars on an investment?

first, you have to have 1 million dollars.

but not really. The book "Billion Dollar Mistakes" describes 11 cases in which hundreds of millions of dollars were lost, and most of them lost money that did not belong to them. As fund managers, most of them lost money from other investors. Of course, some people lost their money, for example, Adolf Merkel, the fifth richest man in Germany, finally committed suicide by lying on the track.

these expensive lessons, such as gambling tycoon, PE god, king of hedge fund, king of shale gas and master of value investment, all happened to top investors, and each of them is worth studying carefully. After all, this kind of billion-dollar mistake is not common, but the mistakes behind it often happen to us. ?

1. A designer in Las Vegas and an old driver in the investment field turned over

People: Kirk, the 41st richest man in the world? Kerkorian

Kerkorian is the American gambling tycoon and the largest shareholder of MGM. He dropped out of school in the eighth grade and became an amateur boxer and fighter pilot in World War II. He founded an airplane leasing company, bought and sold MGM Film Company three times, and owned Xicheng Casino and MGM Hotel. Kekorian is known as the "designer" of Las Vegas, and eventually turned it into a world-class tourist destination. In 215, when Kerkorian died, he had about $4 billion in property.

Event:

This old driver in the investment field sometimes drives over, so be careful, it's a real "car". Kerkorian likes cars very much, and also likes to buy car companies, and has made four important investments.

from 199 to 1995, he earned $2.7 billion by investing in Chrysler. In 25, he became the largest shareholder of GM, but because the board of directors refused to change in the direction he wanted, he cleared out and made a little dividend. In 27, Kerkorian tried to buy Chrysler again, but lost to a PE in the bidding. The so-called "a blessing in disguise", he escaped the bankruptcy of Chrysler and General Motors in the financial crisis.

From April to June, 28, Kerkorian took aim at the automobile company again. He spent $1 billion, accounting for 6.43% of the shares, and became the largest individual shareholder of Ford. However, due to poor performance and financial crisis, Ford shares plunged sharply, while Kekelian had to sell the shares because of his own debt problems. From October to December 28, Kekelian cleared Ford shares and lost 7-8 million dollars.

2. PE exists like a god, but it lost $1.35 billion in the most familiar company for five months.

Person: David, co-founder of Texas Pacific Investment Group (TPG)? Bondeman (Chinese name, Pang Dewen)

TPG (Detai Investment) is one of the largest private equity investment institutions in the world. At present, it manages more than 5 billion US dollars of assets through its series of private equity funds, and is even called the existence of the PE world. Compared with competitors Blackstone, Carlyle and KKR, TPG's popularity in China is slightly inferior. However, this does not affect the position of TPG and Bondeman in the industry. The record of M&A transaction volume of $11 billion a year (26) created by TPG is still unparalleled. Investment cases such as SDB and Lenovo Group also make TPG a real winner in China.

Event:

Buying troubled enterprises has always been David Bond Man's specialty, and he is very familiar with Washington Mutual Bank. The merger of American Savings Bank, which made him famous in World War I, was sold to Washington Mutual Bank, where he served as a director and was a good friend with the CEO for many years.

in April, 28, TPG invested USD 1.35 billion and joined other investors to acquire shares in Washington Mutual Bank with a total amount of USD 7 billion. In September, Washington Mutual Bank was taken over by the Federal Deposit Insurance Corporation of the United States because of insufficient liquidity. Within five months, TPG's $1.35 billion was reduced to ashes, which is probably the most failed transaction in the private equity industry, and it was also selected as the top ten worst transactions in 28 by Time magazine of the United States.

3. "king of shale gas"? He lost his shares and was driven out of the company he founded, and finally died on the street

Person: Aubrey mcclendon, CEO of Chesapeake Energy Company and owner of NBA Thunder Team

mcclendon was once rated as the most daring billionaire in the United States by Forbes. He started his company from scratch with $5,, and in 28, his personal net worth was as high as $3 billion. Chesapeake Energy Company, which he founded, became the second largest natural gas producer in the United States, second only to ExxonMobil, an industry giant, and changed the shale gas industry in the United States. He also bought the NBA team "seattle supersonics Team" in partnership with his friends, and moved the whole team to his city and renamed it Oklahoma Thunder Team.

event:?

mcclendon is very confident in his Chesapeake company. He keeps buying stocks and does not hesitate to use high leverage. One of his financing methods is to use stocks as collateral and borrow $1 for every $3 of stocks. However, as the price of natural gas plunged and the stock plummeted in September 28, mcclendon's collateral shrank sharply. Mcclendon was forced to sell almost all his shares in Chesapeake Energy Company, with a net loss of $2 billion, accounting for two-thirds of his assets.

in January, 213, Chesapeake's board of directors ousted mcclendon, who was named the best president of the year in the United States, and had to leave the company he founded 23 years ago in this way.

In March 216, mcclendon was charged with illegal oil procurement and bid rigging for natural gas. Strangely, one day later, he drove too fast and crashed into the concrete wall of the expressway, and died on the spot. News reports, "don't rule out the possibility of suicide", but it doesn't matter.

4. How does the most well-known hedge fund manager on Wall Street catch the flying knife

Person: top activist investor, Bill? Ackerman

is one of the most famous active managers of hedge funds. As the founder and CEO of Pershing Square management fund, he was ranked first in the annual ranking of the top 1 global hedge funds in 214. In the past few years, its hunting targets have included Herbalife, Aijian Pharmaceutical, Target Department Store, McDonald's, Wendy's, the third largest hamburger chain in the United States, and Borders Group, the second largest traditional book retailer in the United States. In the past two years, the famous case is that doing more Valeant pharmaceutical and shorting Herbalife all failed miserably. At present, the assets under management are US$ 8.2 billion, far below the peak of US$ 2 billion in July 215. He was also one of the biggest RMB bears.

Event:

In the 21st century, traditional retailers have been defeated by e-commerce. At this time, investing heavily not only has the effect of value discovery, but also has the meaning of doing everything for the sake of "tradition".

Before Amazon appeared, Barnes & Noble Bookstore and Borders Group monopolized the American book retail market. But after Amazon appeared, things were different. In 28-29, Pershing Plaza took over the flying knife and gradually bought 1/3 of the shares of Borders, with an average of $1 per share, and changed the management and strategic direction of the company to influence the investment target through the usual tricks of activist investors. But in the end, the company still can't avoid the fate of bankruptcy liquidation, and investors are wiped out.

In the investment in another retailer, Ackerman lost even worse. In 27, Pershing Plaza set up a special IV fund and invested $2 billion in Target, most of which bought stock options instead of stocks. Although Ackerman's judgment on Target's value was correct, it also successfully pushed Target's management to release the company's value. However, when Target stock fell by 1% in January 29, the net value of Pershing Plaza IV Fund fell by 4%, and by the end of February, it fell by 9%. The reason is that he bought options, not stocks.

5. Never wither: Earn 1.2 billion yuan in 6 weeks, and then lose 1 billion yuan in 5 months

Person: Nicholas, founder of Never Wither Consulting Company? Mahonis

Nick Mahonis is an expert in convertible bond arbitrage, and has hired experts in merger arbitrage, long-short equity investment, credit arbitrage and statistical arbitrage. In 2, Mahonis founded the Immortal Flower Fund with $6 million, which means flowers that never wither. The most brilliant record is that he earned $1.2 billion in six weeks.

Event:

Brian Hunt, a star trader, joined the company in 24 and had a brilliant record in natural gas futures trading in 25, so Mahonis trusted Hunter very much. In 26, Buhua increased its investment in natural gas futures. In April, Hunter helped the company earn a profit of $1.2 billion in six weeks. But then the energy market changed suddenly, and the profits before the flowers died out. At this time, more than half of the assets are bet on energy trading. Because the risks are too concentrated, huge losses come from the mountains. In September, 26, Bubanhua Company declared bankruptcy due to a huge amount of speculative natural gas futures loss of $9.25 billion, which became the biggest speculative loss event in the history of global commodity futures market and hedge fund industry. The flowers that don't wither finally wither.

6. A legendary investor who is as famous as Soros was cheated by a buffoon.

Person: Leon, founder of Omega Consulting? Kuperman

Leon Kuperman enjoys the reputation of "legendary investor" in American hedge fund circles. Omega Consulting, a hedge fund he founded in 1991, was once called one of the four largest hedge funds in the world with Julian Robertson's Tiger Fund, George Soros's Quantum Fund and meriwether's Long-term Capital Management Company. The latter three were closed for various reasons, and only Omega has stood up to this day.

Event: Emerging markets are very dangerous investment areas. Sometimes, all the profits earned through hard work will be swept away by swindlers. Kuperman, the most honest, knowledgeable, prudent and astute investor, suffered a crushing defeat in emerging markets. Kuperman went to buy the option of an Azerbaijani super-large state-owned oil plant under the connivance of Victor Kozeny, a Czech nicknamed "Pirate of Prague", and his investment manager. In fact, Kuperman paid $25 per share, while Kozeny spent less than $1 per share. In the end, Kuperman's investment manager was arrested, but Kozeny was at large in the Bahamas where there was no extradition agreement with the United States.

7. "This time is different", when the value investment master faces the value trap

Person: Richard, founder of Puzena Investment Management Company? Puzena

Puzena (also translated as "Zena"), Joel Greenblatt (author of "Stock Market Genius" and "Stock Market Steady Earnings") and Bruce newberg are classmates of Wharton Business School. They have written papers on securities analysis together, and later all three have become famous value investors. Puzena is regarded by the latter two as the smartest person he has ever seen, and he is also famous for his commitment to "deep value investment". He is good at learning experiences, lessons and inspirations from history, especially at studying the normal profits of cyclical enterprises, and bargain-hunting at the bottom of the cycle. By the end of July 214, the company * * * managed assets of $26.4 billion.

Events:

Puzena is good at analyzing historical experience and past data. However, "history can be used as a reference to interpret facts, but it cannot be used as a reference to interpret people's psychological conditions." History is not repeated constantly, and new history is being created, which has also become the risk and charm of investment. In 27, he invested his money in highly reliable investment targets, among which financial stocks accounted for more than 4% of the positions, most of which were Freddie Mac and Fannie Mae, which survived the financial crisis in the 198s and became classic investment cases of many value investors (including Buffett). But this time it's really different. Fannie and Freddie were nationalized, and Puzena Investment Management Company suffered heavy losses, and its asset value decreased by 46% in 28.

8. The best hedge fund of the year went bankrupt one month after receiving the prize, losing $17.9 billion.

People: Jeff Grant and Ron Baylor, founders of Peloton Partners

Peloton Company was jointly founded by Jeff Grant and Ron Baylor in 25, and it was one of the best hedge funds in 27, with a yield of over 8%. In January 28, Peroton Company won two authoritative awards at a grand European hedge fund award ceremony. However, a month later, the company went bankrupt.

Event:

Peloton Company set up an ABS fund, the main target of which is mortgage-backed securities in the US real estate market. The strategy is to make high-credit securities and short low-credit securities. This strategy was after the subprime mortgage crisis in the United States, because the short-selling part earned a full profit. However, after that, ABS's long position was severely hit by the subprime mortgage crisis, and at the same time, because ABS funds used about 9 times of financial leverage as Pelton usually did. Since then, the transaction has been developing in the opposite direction as originally envisaged, and the bank requires additional margin. As a result, the company ran out of liquidity and ended up as a speculator, losing $17 billion in "a few days".

9. "Godfather" of German economy, billionaire committed suicide while lying on the track

Person: Adolf Merkel, the fifth richest man in Germany

Adolf Merkel (whose name is domineering and translated as "Merckle") is one of the richest businessmen in the world, and his enterprises include pharmaceutical companies and Heidelberg Cement Company. Merckle, with his plain appearance, simple life and low profile, embodies the shrewd and practical qualities of German family entrepreneurs. He was once called the "symbol" of German industrial spirit and one of the great "godfathers" during Germany's post-war economic take-off. In 26, Merkel's wealth was $11.5 billion, ranking 36th in Forbes' list of the world's richest people and 3rd in Germany. In 27, the wealth was US$ 12.8 billion, ranking 44th in the world and 4th in Germany. In 28, it shrank to $9.2 billion, but it still ranked 94th in the world and 5th in Germany.

Event:

Merkel, once a conservative industrialist, was dramatically planted in highly leveraged investment. In October, 28, because she was not optimistic about the future of the auto industry after the financial crisis, Merkel made a big short on Volkswagen common stock. Unexpectedly, he encountered an epic Porsche-Volkswagen acquisition case. On November 27th, Volkswagen's stock flattened short and soared from 2 euros to 1,5 euros, which caused heavy losses to the Merkel family. At the same time, because the family business owed too much (tens of billions of euros), it could not repay its debts on time.