ageofsocrates Posted June 5, 2014 Share Posted June 5, 2014 Munger always said Invert. So wanted to start a new thread to focus on the worst capital allocation ever as a way to dissect investment mistakes. My pick. Time Warner/AOL Merger. A decade ago, America Online merged with Time Warner in a deal valued at a stunning $350 billion http://www.nytimes.com/2010/01/11/business/media/11merger.html?_r=0&adxnnl=1&pagewanted=all&adxnnlx=1401962619-JOAjptD+WWsNWXwVBWmRZw Link to comment Share on other sites More sharing options...
stahleyp Posted June 5, 2014 Share Posted June 5, 2014 Ah yes, that's certainly up there. THe JDS Uniphase and SDL merger was crazy too. JDSU bought them for like $41 billion. Now the market cap of the entity is... $2.5 billion. http://www.jdsu.com/News-and-Events/news-releases/Pages/jds-uniphase-and-sdl-agree-to-41-billion-merger.aspx Link to comment Share on other sites More sharing options...
ourkid8 Posted June 5, 2014 Share Posted June 5, 2014 Bank of america buying countrywide! Link to comment Share on other sites More sharing options...
rmitz Posted June 5, 2014 Share Posted June 5, 2014 Munger always said Invert. So wanted to start a new thread to focus on the worst capital allocation ever as a way to dissect investment mistakes. My pick. Time Warner/AOL Merger. A decade ago, America Online merged with Time Warner in a deal valued at a stunning $350 billion http://www.nytimes.com/2010/01/11/business/media/11merger.html?_r=0&adxnnl=1&pagewanted=all&adxnnlx=1401962619-JOAjptD+WWsNWXwVBWmRZw Munger isn’t dead yet. And it was a great deal from AOL’s perspective. :) Link to comment Share on other sites More sharing options...
augustabound Posted June 5, 2014 Share Posted June 5, 2014 I spent the better part of 1990-1992 buying baseball cards......... Link to comment Share on other sites More sharing options...
stahleyp Posted June 5, 2014 Share Posted June 5, 2014 I spent the better part of 1990-1992 buying baseball cards......... +1 ;D 8) Link to comment Share on other sites More sharing options...
Uccmal Posted June 5, 2014 Share Posted June 5, 2014 Me selling Rim puts when it was above $40.00 despite all evidence against it. FFH buying TIG. Ffh buying Canwest Global common stock right to the days before the bankruptcy. sorry couldn't resist.... Thousands of Canadians buying Brex at a price higher than all the gold allegedly in the ground. Millions buying Nortel when it had a market cap of 200 b US with no profits in recent memory. Link to comment Share on other sites More sharing options...
DCG Posted June 5, 2014 Share Posted June 5, 2014 Maybe not the worst ever, but Eddie Lampert buying back billions of SLHD stock at prices between $100-$150/share was pretty bad. Pretty sure Michael Dell made a lot of awful buyback decisions as well. Link to comment Share on other sites More sharing options...
Palantir Posted June 5, 2014 Share Posted June 5, 2014 How about Microsoft's investment into Apple when Apple was a few weeks away from bankruptcy? ;D Link to comment Share on other sites More sharing options...
OracleofCarolina Posted June 5, 2014 Share Posted June 5, 2014 Bank of america buying countrywide! Wachovia buying Golden West Link to comment Share on other sites More sharing options...
Sportgamma Posted June 5, 2014 Share Posted June 5, 2014 Native Americans selling Manhattan? Link to comment Share on other sites More sharing options...
ItsAValueTrap Posted June 5, 2014 Share Posted June 5, 2014 Insiders lining their own pockets. This happens very frequently in the stock market... Link to comment Share on other sites More sharing options...
Guest wellmont Posted June 5, 2014 Share Posted June 5, 2014 Buffett buying Berkshire Hathaway. ;) Link to comment Share on other sites More sharing options...
Mephistopheles Posted June 5, 2014 Share Posted June 5, 2014 Pretty sure Michael Dell made a lot of awful buyback decisions as well. Yeah but he made up for it by stealing Dell at a good price. :P Link to comment Share on other sites More sharing options...
frugartarian Posted June 5, 2014 Share Posted June 5, 2014 Tulips Link to comment Share on other sites More sharing options...
krazeenyc Posted June 5, 2014 Share Posted June 5, 2014 In May of 2010 Laszio offers to buy a couple of pizzas for 10,000 Bitcoin -- hopefully they were delicious. I'll pay 10,000 bitcoins for a couple of pizzas.. like maybe 2 large ones so I have some left over for the next day. I like having left over pizza to nibble on later. You can make the pizza yourself and bring it to my house or order it for me from a delivery place, but what I'm aiming for is getting food delivered in exchange for bitcoins where I don't have to order or prepare it myself, kind of like ordering a 'breakfast platter' at a hotel or something, they just bring you something to eat and you're happy! I like things like onions, peppers, sausage, mushrooms, tomatoes, pepperoni, etc.. just standard stuff no weird fish topping or anything like that. I also like regular cheese pizzas which may be cheaper to prepare or otherwise acquire. If you're interested please let me know and we can work out a deal. Thanks, Laszlo https://bitcointalk.org/index.php?topic=137.0 Link to comment Share on other sites More sharing options...
JBird Posted June 5, 2014 Share Posted June 5, 2014 This is a great thread! Link to comment Share on other sites More sharing options...
OracleofCarolina Posted June 5, 2014 Share Posted June 5, 2014 Native Americans selling Manhattan? Not so fast...from Buffett 1965 One story stands out. This, of course, is the saga of trading acumen etched into history by the Manhattan Indians when they unloaded their island to that notorious spendthrift, Peter Minuit in 1626. My understanding is that they received $24 net. For this, Minuit received 22.3 square miles which works out to about 621,688,320 square feet. While on the basis of comparable sales, it is difficult to arrive at a precise appraisal, a $20 per square foot estimate seems reasonable giving a current land value for the island of $12,433,766,400 ($12 1/2 billion). To the novice, perhaps this sounds like a decent deal. However, the Indians have only had to achieve a 6 1/2% return (The tribal mutual fund representative would have promised them this.) to obtain the last laugh on Minuit. At 6 1/2%, $24 becomes $42,105,772,800 ($42 billion) in 338 years, and if they just managed to squeeze out an extra half point to get to 7%, the present value becomes $205 billion. So much for that. Some of you may view your investment policies on a shorter term basis. For your convenience, we include our usual table indicating the gains from compounding $1,000,000 at various rates. Link to comment Share on other sites More sharing options...
randomep Posted June 5, 2014 Share Posted June 5, 2014 Buffett buying Berkshire Hathaway. ;) You are joking right? That's Buffett's worst investment, but there are hundreds of thousands of money managers who are dumber than Buffett, their worst decisions must be worse than Brk? no? Link to comment Share on other sites More sharing options...
Stone19 Posted June 5, 2014 Share Posted June 5, 2014 Edgar Bronfman getting rid of Seagrams and rolling the family fortune into Vivendi. Link to comment Share on other sites More sharing options...
ASTA Posted June 5, 2014 Share Posted June 5, 2014 Stone19 Thanks for sharing did not know that story my 5 min research just baffles me :D Link to comment Share on other sites More sharing options...
Stone19 Posted June 5, 2014 Share Posted June 5, 2014 Made no sense.You would think you would be happy with a huge liquor company.I know that's why I own Diageo it makes me very happy.So does it's products lol Link to comment Share on other sites More sharing options...
KCLarkin Posted June 5, 2014 Share Posted June 5, 2014 Buffett buying Berkshire Hathaway. ;) You are joking right? That's Buffett's worst investment, but there are hundreds of thousands of money managers who are dumber than Buffett, their worst decisions must be worse than Brk? no? Yes, but Buffett's mistakes compound at a much higher rate. Link to comment Share on other sites More sharing options...
randomep Posted June 5, 2014 Share Posted June 5, 2014 OH ya, good point. Link to comment Share on other sites More sharing options...
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