When thinking about the best investments ever made, most of us probably think about one of Warren Buffett’s. Like his Coca-Cola or See’s Candy investment, which both had spectacular returns.
Although consistent performance over a long period is the best way to build wealth, that’s not what we’re looking at today. Today we’re looking at the single best investment ever made and some honorable mentions.
There were plenty of investments to consider, and deciding which one to go with wasn’t easy. In the end, I had two favorites, but only one of them classified an investment. I will list the other one below as one of the best trades ever made.
The best investment ever made
The early bird gets the worm. Being the first one to invest in Facebook sure had its upside. A billion-dollar upside. Just ask Peter Thiel.Embed from Getty Images
In 2004, co-founder of PayPal, Peter Thiel was the first person to invest in Facebook. His investment of $500,000 bought a 10.2% stake in the company. After Facebook’s IPO in 2012, he unloaded the majority of these shares for $1,03 billion. That’s a 2,060x return, or 205,900% increase on his original investment in eight years.
That’s a surreal return, and I don’t think anyone blames him for unloading his position. If he hadn’t sold them, though, his 44.7 million shares would have been worth $11,5 billion. (A 23,000x return or 2,299,900% increase.) Now that’s ridiculous.
Since 2012 he has sold almost all of his remaining shares. Shares for $100m in 2016 and $29m in 2017, putting his total return at $1,159 billion. As of April 2020, he owns less than 10,000 shares.
Other high returning investments
- Jeff Bezos was one of the first people to invest in google. In 1998, $250,000 bought him 3.3 million shares. Today, in 2021, they’re worth roughly $6 billion, a 24,000x return.
- Warren Buffett investing $25m in See’s Candies in 1972. At the 2019 Berkshire annual shareholder meeting Buffett said the investment had made them well over 2 billion, a return of over 8000%.
- Softbank‘s investment of $20m in Chinese internet venture, Alibaba in 2000. The investment was worth $60 billion when Alibaba went public in 2014, a 3000x return.
One of the best trades ever made
As I said before, there were two favorites for the best investment ever, but I realized one was actually a trade. So then I had to see if there were any better trades. There were plenty of potential candidates, and I’m sure some will disagree with the one I chose.
I could have picked the legendary trade by Jesse Livermore, short selling the market right before the 1929 crash that led to the great depression, making him about $100m ($1.5 billion in today’s money.) Or George Soros’ bet against the British pound in 1992, making him $1b.Embed from Getty Images
But I still ended up choosing Bill Ackman’s trade in early 2020, turning $27 million to $2,6 billion in three weeks. A 9,500% return in three weeks. After, he reinvested the $2,6 billion in long positions, making another billion in the recovery that swiftly followed the crash, making it one of the greatest trades ever.
It was a controversial trade, though. Ackman was criticized and accused of playing up the coronavirus fear after making a bet against the market.
His hedge began in February when the coronavirus was picking up steam, but panic had not yet set in. He then went on national TV, saying ‘hell is coming’ and asking the president to shut down the country. After, the market crashed, and he unloaded his position.