Even Geniuses Get It Wrong
The ultra-wealthy are presumed to have superior investment judgment. And yet, even billionaires make catastrophic investment mistakes—sometimes losing billions on single bets.
Bill Ackman's Valeant Disaster
The Bet: In 2015, Bill Ackman built a $4 billion position in Valeant Pharmaceuticals, calling it his "highest conviction" investment.
What Went Wrong: Valeant's business model depended on acquiring drugs and dramatically raising prices—attracting regulatory scrutiny. Accounting irregularities emerged. The stock collapsed from $260 to under $15.
The Loss: Approximately $4 billion—nearly the entire position.
The Lesson: "Platform companies" that depend on financial engineering rather than product innovation are fragile.
Carl Icahn's Hertz Bet
The Bet: Carl Icahn accumulated nearly 40% of Hertz shares.
What Went Wrong: COVID-19 devastated travel. Hertz filed for bankruptcy in May 2020.
The Loss: Over $1.5 billion.
The Lesson: Even deep-value investors can be wrong. Unexpected external events can destroy any thesis.
Masayoshi Son's WeWork Catastrophe
The Bet: SoftBank invested over $10 billion in WeWork at valuations reaching $47 billion.
What Went Wrong: WeWork was actually a real estate company with massive losses. The IPO was pulled, and WeWork's valuation collapsed.
The Loss: Billions in write-downs. WeWork eventually filed for bankruptcy in 2023.
The Lesson: Valuation discipline matters. Calling a real estate company a "tech company" doesn't make it one.
Common Threads in Billionaire Mistakes
- Overconfidence from Past Success: Success breeds the confidence that leads to disaster
- Concentration: Large positions amplify both gains and losses
- Narrative Over Numbers: Stories justified unjustifiable valuations
- Ignoring Red Flags: The thesis overshadowed the risks
The Chronos Score Perspective
Billionaire investment mistakes demonstrate that Chronos Score is not guaranteed to increase. A billion-dollar loss at any age reduces future compounding potential.
The optimal Chronos Score strategy includes not just maximizing gains but avoiding catastrophic losses. A 50% loss requires a 100% gain to recover.
Learn from billionaire mistakes with our rankings.