We have created for your delectation, a list of the 9 best investments ever. Given that this is such a broad topic (does Eisenhower’s decision to invest in rail count? Or is it just companies!?), and given the fact that we simply don’t know the return on all investments in everything ever, our list cannot be said to be exhaustive. Bearing that in mind though, these are sterling examples of incredible investments that showed huge amounts of foresight, faith and focus. That, and a little bit of luck.
Goldman…
Back in 2006, Goldman Sachs spent a whopping $2.58bn (£1.68bn) for a measly 4.9% stake in Industrial and Commercial Bank of China ICBC. Sounds like a lot for a little, but apparently not. Three years later Sachs sold 20% of their stock (remember, $2.58bn initially) for $1.91bn (£1.25bn).
…Sax.
A year later, the investment bank sold 20% of their remaining stock for another $2.25bn (£1.46bn). Since then – and I don’t know if you’ve noticed this – there’s been a bit of a financial crisis. Well, they still managed to sell another $1.1bn (£0.7bn) of shares, and have still got a 2.2% stake in the company.
ROI x3.07
Amazon’s headquarters, or so we’re led to believe.
Now, this one works, but it works best if we pretend that it is still 1999. Cast your mind back. Will Smith is still cool. Everyone is excited about the millennium, despite the obvious fact that it isn’t really that exciting. Kleiner Perkins, those cunning foxes, currently have amazon.com stock that has risen by an incredible 55,000%. That’s a massive growth on investment. If only they’d sold it then, before it dropped like a stone!
ROI x41 (Currently)
Anyone else remember this?
1994 was a glorious year. America and Russia stopped aiming nukes at each other, Nelson Mandela was inaugurated as South Africa’s first black President, and Kleiner Perkins invested $4m (£2.6m) for a 25% stake in a funny little company called Netscape.
Fast forward a few years – AOL, pioneers of dial-up internet, buy the company for a whopping $4bn (£2.6bn). Kleiner Perkins’ return on their $4m (£2.6m) is $1bn (£0.65bn). Ridiculous, frankly.
ROI x249
It looks photoshopped, we know. It isn’t.
In 1995, a new venture capital firm called Benchmark was launched. They promised to revolutionise their industry by using teamwork (I know, it sounds dubious), and they had a focus on technology firms.
Good thing they did, too – in 1997 they spent $6.7m (£4.4m) on a company known as eBay. By 1999, their share was valued at approximately $5bn (£3.3bn), one of the best performing stocks and shares ever to grace the Valley.
ROI x746
Things have moved on since those early days.
Back in 1999, when Pikachu was cool and nobody had even heard of Osama Bin Laden, a pair of investment firms paid $25m (£16m) for a 20% stake in Google. Now, even for the promise of a decent return, $25m seems like a lot to stake. Google’s value at the time was around $125m (£81m). It subsequently grew to the point where ,in November 2008, Google’s market capitalisation was around $108bn (£70bn). A massive, massive, massive period of growth.
ROI x863
Not, in fact, a Christian cross stood in a gale.
Back in 2005, a man named Peter Thiel paid $500,000 (£325,000) for a 10% stake in a website called Facebook. At the time it was like MySpace, but nowhere near as good. Fast forward seven years – suddenly, MySpace is like Facebook but nowhere near as good. Oh, and Facebook is now worth not $5m (£3.25m) but $33m (£21m). His initial $500,000 investment will now have grown by around 6,000%, to be worth in the region of two or three billion dollars.
Now that’s money well spent.
ROI x6599
When it comes to investment, two heads are better than one.
And bodies, too.
Andy Bechtolsheim is a fascinating man who has managed to incorporate a very successful career working with computers in Silicone Valley with a very successful career investing in people that work with computers in Silicone Valley. King among these investments, and possibly all investments, was the $100,000 (£65,000) Bechtolsheim paid in 1998 (along with one other person) to fund a company called Google.
Now, it is 2012 and Bechtolsheim’s one hundred grand is worth a stonking $1.7 billion. His $100,000 (£65,000) is now worth seventeen thousand times as much as it was initially.
ROI – x17,000
THIS is where to invest.
Teamwork pays. In terms of a return on investment, it’s pretty difficult to beat what the banks managed to achieve when, instead of going for each other’s throats, they decided to work together. “When,” I hear you cry with bug-eyed curiosity, slavering mouth agape, “did that happen?”.
Saving lunch money really pays off.
Well. In 2008, the companies that were the principal beneficiaries of the congressional bailout bill spent $77m (£50m) lobbying the government, in addition to $37m (£24m) in campaign contributions. That $77m (£50m) dollars was wisely invested in convincing our dear legislators that banks couldn’t possibly be allowed to fail.
They also managed to convince our dear legislators that the only really feasible option was to bail them out of any hole they happened to get themselves into. Money well spent? The companies involved were recipients of a $700 BILLION (£455m) bailout, giving them a return nearly 19,000 times their initial investment.
ROI – x18,917
A board meeting at one of America’s more conservative investment banks.
This might not be an obvious choice, but it’s a lot more interesting than most investment stories. In 1492, Christopher Columbus needed investment. He had a harebrained idea that he could set sail in the wrong direction and reach India. The King and Queen of Spain, Ferdinand and Elizabeth, having refused funding for the last two years, finally agreed.
You’re investing in what now?
With his funding in place, Columbus set off. The silver that flowed back to Spain over the next 300 years, as it ruled South America, paid for armies, war and technology. The Potosi mines alone generated 8,200 metric tonnes of silver – worth, at today’s prices, around $9.7bn (£6.3bn).
ROI – x63,815
What can we take away from this? It’s clear to say that if you want to get really, really rich, investing in new technology ‘before the curve’ is the way to go.
However if you want to get really, really, REALLY rich – conquer an entire resource-rich continent.
Antarctica anyone?
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