06 Aug

The 5 worst investments in History

August 6, 2020

By Adinah Brown

Risk or Reward. When you venture into the field of investments, you must be ready to face both of these realities. The rate of investment returns that you want to obtain typically equates to the level of risk that you need to undertake. In any investment, whether stocks, foreign exchange, bonds and even insured investments, risk is a reality that in one way or another impacts your financial welfare. In many instances, investors allow their emotions to cloud their judgement and make investment decisions that are based on their gut feelings rather than a measured and carefully calibrated risk strategy. Check out the stories of folks dubbed as having delivered the worst investments in history. Do yourself a favor and learn from their mistakes, and keep yourself out of the turmoil!

Currency Bets Loss of Brazilian Pulp Maker
Did you know that the world’s bleached eucalyptus-pulp magnate, Aracruz, lost $2.5 billion in 2008 from Forex trades? By taking a chance on Brazil’s real to hurdle the then weaker dollar, the company met its untimely death when the real was defeated in the battle. Aracruz crashed and a merger between Aracruz and VCP ended up being established in 2009, under the new name of Fibria.

Yung’s Dishonorable Exit from CITIC Pacific
What goes up must come down, and that is exactly what happened to the luck of Larry Yung, mainland China’s former richest man. The year 2008 was not among his best years, as he was forced to exit the company he founded, CITIC Pacific, leaving it crippled with a $2 billion deficit caused by HKD $15.9 billion (US $2.3 billion) worth of mishandled efforts to defend movements against the Australian dollar. The move was intended to safeguard the mining venture in Australia, however, the Australian dollar rocketed against the US dollar, bursting all the contracts and forcing payouts from CITIC.

Hyperinflation and $5,000 Gold Prophecies of Faber and Schiff
Stock market’s deemed facts turned into lies. Hyperinflation alerts and predictions were signaled by Marc Faber in 2009 when he claimed that the U.S. dollar would have parallel worthlessness to its Zimbabwean equivalent due to the massive “money printing” or bond buying and zero interest rates by the Federal Reserve, which he implied. Likewise, Peter Schiff came up with his own theory that gold would make a mark at $5,000 an ounce. Neither of the two predictions were actualized, which disappointed many central bankers.

Turner’s AOL Time Warner Misfortune
Not always are two heads better than one. Bringing the future of media into being was the goal of the partnership of Ted Turner’s Time Warner and Steve Case’s AOL in 1999. A $350 billion value of all-stock deal was just too much of a bend, breaking Turner’s back. The merger imprinted the largest non-profit in the business world at that time, summing up to a $99 billion defeat. This resulted in the eviction of Turner as chairman and a personal damage bill of $7 billion as the stock price plunged.

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Not Your Usual Disney Happy-Ever-After
Mickey Mouse was not happy with this one. The iconic animation and family entertainment organization, Disney, found itself in a fiasco when it extended full length into the digital era upon launching an Internet portal site tagged as Go.com. However, the website didn’t stand a chance against its rivals, which included Yahoo!. It ended up going under only a couple of years following its debut. Subsequently, Go.com recorded a debt of $1 billion in 1999; $900,000 in 2000; and reached a $750-million deterioration in 2001.

About the Author:

Adinah Brown is a professional writer who has worked in a wide range of industry settings, including corporate industry, government and non-government organizations. Within many of these positions, Adinah has provided skilled marketing and advertising services and is currently the Content Manager at Leverate.

 

 


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