Biggest
Millionaire Flops By Katie Adams
Tuesday, June 16, 2009
Portfolio
losses got you down? That's understandable. The dramatic 2008
market drop-off caused the S&P 500 Index to tumble 37%,
wiping out more than $4 trillion in workers' retirement plan
savings alone. Continued stock market and housing value declines
in the first quarter of 2009 resulted in an additional loss
of $1.3 trillion of savings for Americans.
If you lost money, you're not alone, but at least you can
put some blame on the market. Major errors of judgment have
cost some of the world's richest people more than just a pretty
penny - and these are people who have a lot to lose. Console
yourself with these famous financial flops.
1. Two Rocks and a (Could Have Been) $17 Billion
Family Legacy
In 1883, Dr. William Howey went to check on crews building
the Canadian Pacific Railway. While searching for a lost worker,
he found some interesting copper-colored rocks and pocketed
them. Upon returning home he sent them to the director of
the Geological Survey of Canada. The verdict? The stones were
deemed worthless, and Howey threw them away.
A contractor picked them up, and a year later decided to
check out the site where they were found. It turned out those
"rocks" were copper and the contractor - Thomas
Murray - had discovered one of the world's largest copper
deposit, producing millions of dollars of ore. When it was
discovered the ore contained high levels of highly sought-after
nickel, the deposit was named the International Nickel Company
of Canada, and went on to become the second-largest producer
of nickel worldwide. In 2006, Vale (NYSE: VALE) (previously
CVRD) bought the company (named INCO) for $17 billion. Talk
about a rock-solid investment!
2. A $75 Million Marital Mistake
Madonna may have a knack for putting out hit records, but
her most recent divorce to film director Guy Ritchie will
hit the "material girl" where it really counts -
the wallet. Why? No prenuptial agreement. The 25-time gold
record winner will pay her ex-better half $75 million as part
of their divorce settlement. That equates to just a little
less than $10 million for each year of their eight-year marriage.
Don't feel too bad for the pop and rock icon, however - she's
still worth more than $400 million.
3. A $54 Million Hand-Motion Markdown
Vegas casino owner and art collector Steve Wynn was entertaining
a small group of friends in the fall of 2006 when he decided
to show them his prized Picasso "Le Reve," ("The
Dream"). He had recently agreed to sell the piece for
$139 million to fellow collector and hedge fund director Steve
Cohen. But Wynn's "dream" turned into a nightmare
when, with one seemingly harmless hand motion while hosting
a party at his home, he put his elbow through the famous painting
of Picasso's mistress. The shocked guests vowed to keep silent
about the incident and Wynn later chose to keep the painting;
it was restored but dropped in value to $85 million. It cost
Wynn $90,000 for restoration work.
4. Stop That $4 Million Cab!
Grammy-award-winning Russian violinist Philippe Quint will
always double-check before stepping out of a cab. In 2008,
he left a $4 million 1723 Antonio Stardivari violin in the
back of a taxi after a ride home from Newark Airport. There
are fewer than 700 of the handmade, highly-prized instruments
worldwide.
Six frantic hours after reporting the loss, Quint got a call
from the port authority that driver Mohamad Khalil had returned
to the station with his instrument. When the two met, Quint
fell to his knees in thanks; to demonstrate the depth of his
gratitude Quint later treated Khalil and 200 of his cabbie-driving
comrades to a 30-minute private concert at the airport. But
although Quint managed to come out of his million-dollar ordeal
without parting with a penny, Quint's orchestral peer David
Garrett wasn't so lucky. The world-class musician tripped
at the end of a concert and landed on his 290 year-old Stradivari
violin, destroying the priceless instrument.
5. What?! Call That $2 Million Foul, Ref!
Wimbledon champion and TV commentator John McEnroe wouldn't
let an opponent get away with anything on the tennis court,
but a high-flying rare art salesman got away with $2 million
of McEnroe's fortune. Lawrence Salander, a New York art dealer,
defrauded McEnroe through an elaborate scam by selling him
half-shares in painter Arshile Gorky's pieces "Pirate
I" and "Pirate II." One slight detail the dealer
forgot to divulge: he didn't own the paintings.
6. The $1.5 Million Ferrari Fiasco
Actor Eddie Griffin had the best of intentions when he signed
up to drive a race car for a charity benefit and to promote
his 2007 movie "Redline," in the process. Eager
to show off his driving prowess, he slid behind the wheel
of a $1.5 million Enzo Ferrari - one of only 400 produced
worldwide. Just moments after taking the wheel, Griffin took
a corner a little too tight, clipped a cone and locked the
wheels of the prized car, slamming it into a concrete barrier.
Although he walked away unharmed, the rare car was declared
a total loss.
Could it get any worse? Actually, yes. The car was owned
by Griffin's boss, "Redline" executive producer
Daniel Sadek.
The next time portfolio losses have you down, just be glad
that you can blame some of your woes on the market, rather
than your own poor judgment. These millionaires' financial
flops prove they haven't been nearly so lucky.