Author Topic: Who's laughing now? Deals that looked stupid but turned out great  (Read 14809 times)

Paul der Krake

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Straight from the "I'm not as clever as I think I am" department, and as a humble reminder that the future is unpredictable, let's discuss deals that looked awful on paper, yet turned out to be fantastic investments/ideas.

I'll start.

Back in April 2012, techies everywhere woke up to the news that Facebook had spent a cool BILLION dollars to buy Instagram, a photo application with no revenue that let you slap a filter on your smartphone camera and share it with your friends. Many techies screamed bubble. The internet erupted with Zuck memes.

A short 3 years later, Instagram is predicted to reach $500 million in revenue in 2015 alone, with projected growth topping the $2B mark by 2017. Not too shabby a return.

Your turn.

Rightflyer

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Re: Who's laughing now? Deals that looked stupid but turned out great
« Reply #1 on: October 22, 2015, 07:57:22 AM »
A personal story that seems to fit...

In the 80's a work colleague dragged me along to a franchising conference/show. He was very hot on the possibilities of acquiring the rights to a regional master franchise for a fast food chain. When he told me it was for a sub shop I laughed. "Look," I said, "We already have Mr. Subs all over Ontario...there's only so many subs people will eat.
Now to be fair I had never heard of Subway at that point. I guess he was right.

ketchup

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Re: Who's laughing now? Deals that looked stupid but turned out great
« Reply #2 on: October 22, 2015, 08:25:40 AM »
I know a guy that worked his ass off in the early 80s right after college, saved up about $100,000.  Everyone told him he was nuts because he decided to invest it all in this little company called Microsoft....

He cashed out in the late 90s.  He's doing pretty well these days.

Bracken_Joy

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Re: Who's laughing now? Deals that looked stupid but turned out great
« Reply #3 on: October 22, 2015, 08:55:03 AM »
My first car. This poor beast was 200,000 miles when I got it. I drove this car for years before it started having several problems: namely, the radiator was leaking, the brake pads all needed replacing, the tires were worn down, the electric for a tail light panel was out, and the battery was discharging all the time (I got super speedy with a jump pack).

KBB on this car at this point was probably $3k. (It's now $1.5k). My family told me to scrap it and get another car. But I had faith this car would keep truckin' on (pun intended). I replaced the electric myself, bought tires out of a junk yard, and found the battery draw with the help of my uncle. Sadly, I couldn't do some work myself- the battery still needed replaced, the radiator fixed, and the brake pads fixed. I was able to get this all done, I forget exactly how much. There might have even been some other work too. $700 maybe? It wasn't bad compared to the $2,200 initial estimate I got, but still not good for a car that my dad described as "the only way it could be rougher is if it was bigger".

In a twist of irony, my parents then bought me a truck as a college graduation present. So this old car got loaned to family friends for a year who were in a rough financial spot. And then borrowed by an aunt. Now my parents snow-bird, and it's used as a back-up car when they're in town.

Now for the great part. Two of my brothers have much newer cars, 10 years newer at least than Old Car. Same model. Both their cars, AND my mom's truck, are having major issues right now. In and out of the shop all the time. Costing thousands over the years. And guess what rig everyone wants to borrow now? That's right, Old Car. Now at 275k miles, Old Car is still humming along. No major repairs since the money I put in 5 years ago. Heck, people haven't even changed the poor beast's oil on schedule. But it just keeps humming along. Not bad for a rig everyone said I should scrap!

Lo and behold, my parents bought the same year, same model car for their house where they snowbird.

partgypsy

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Re: Who's laughing now? Deals that looked stupid but turned out great
« Reply #4 on: October 22, 2015, 09:35:29 AM »
I wish I could say my Dad actually invested but...
My Dad's accountant told him of a local (Oak Brook) company that was a hamburger franchise, and he could invest in the ground level in a company that was rapidly expanding. My Dad scoffed, saying it only takes 5 minutes to cook a burger at home, there shouldn't be that big of demand for these restaurants. It was McDonalds.

dude

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Re: Who's laughing now? Deals that looked stupid but turned out great
« Reply #5 on: October 22, 2015, 09:47:07 AM »
A personal story that seems to fit...

In the 80's a work colleague dragged me along to a franchising conference/show. He was very hot on the possibilities of acquiring the rights to a regional master franchise for a fast food chain. When he told me it was for a sub shop I laughed. "Look," I said, "We already have Mr. Subs all over Ontario...there's only so many subs people will eat.
Now to be fair I had never heard of Subway at that point. I guess he was right.

Haha!  Oh god, I have two such stories.  In the first, a friend, about 25 years ago, LONG before there was a Starbucks and DD on every corner in America came up with the idea for a gourmet coffee shop. He ran it by a restauranteur friend who said, "Are you kidding me?  Do you know how many cups of coffee you'd have to sell everyday to make any money?!"  Yeah, way before $3 coffee became a thing . . .

The second one is, about the same time, 20-25 years ago, a friend and I started craft brewing. This friend's father-in-law was also a restauranteur.  We made some good beers. My friend suggested we should consider honing our craft and opening a brewpub/restaurant.  At the time, there were a handful in our area (and many more in other areas of the country like Cali and Denver).  My reaction was, "dude, that's already played out.  There's already a bunch of craft beers and brewpubs out there."  F me, every day, 20+ years later, a new one seems to me opening near me, and we must have several dozen within a 10 mile radius of me.  It pains me sometimes that I pissed away my opportunity to brew beer for a living!

partgypsy

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Re: Who's laughing now? Deals that looked stupid but turned out great
« Reply #6 on: October 22, 2015, 01:18:24 PM »
That reminds me in the early 90's I went on a bus tour of Wisconsin. There was a wine tasting as part of the tour. I reqested whether could add or change itinerary to a microbrewery instead of a winery (question: is Wisconsin known for their beer or their wine?) and the tour guide looked at me like I was crazy.
« Last Edit: October 22, 2015, 01:20:00 PM by partgypsy »

spud1987

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Re: Who's laughing now? Deals that looked stupid but turned out great
« Reply #7 on: October 22, 2015, 01:55:10 PM »
Seward's purchase of Alaska. I'd like to see the ROI on that!

I haven't made any major deals that would qualify for this thread (but no big mistakes either). But I remember my family thinking it was a stupid idea for my aunt to purchase a home in SF for $475k in 1997. That home is now worth roughly $2.5M!

One Noisy Cat

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Re: Who's laughing now? Deals that looked stupid but turned out great
« Reply #8 on: October 22, 2015, 06:00:31 PM »
    When my parents bought a house in 1965, the bank charged 5.75%. My mother screamed "highway robbery!" but they bought it anyways on a fixed rate. A couple years later interests rates skyrocketed and remained high for a couple of decades so my mother was "thank goodness we got that fixed rate and never got any foolish debt to make us take out a second mortgage".
   The first of each month I say a thank you to the USCG reservist who in 1986 talked me into joining the reserves after my 8 years active duty ended.  Retirement check, didn't waste those 2922 points.

rocketpj

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Re: Who's laughing now? Deals that looked stupid but turned out great
« Reply #9 on: October 22, 2015, 11:32:17 PM »
I know a guy that worked his ass off in the early 80s right after college, saved up about $100,000.  Everyone told him he was nuts because he decided to invest it all in this little company called Microsoft....

He cashed out in the late 90s.  He's doing pretty well these days.

I had a roommate in 1990 that was in IT and strongly suggested I invest in Microsoft.  I said 'no, I must pay for college'.  As it happens, that was the wrong choice for me.

Expatriate

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Re: Who's laughing now? Deals that looked stupid but turned out great
« Reply #10 on: October 23, 2015, 12:07:37 AM »
I seriously considered buying $1000 of bitcoin back when they around 2 bucks. Decided against it. Would have made the road to retirement a lot shorter.

FIRE me

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Re: Who's laughing now? Deals that looked stupid but turned out great
« Reply #11 on: October 23, 2015, 12:19:02 AM »
Bitcoin. If I had bought $100 in Bitcoin when I first heard of it, I'd be retired right now. I thought it was just another scam, another way to separate fools from their money.

TheNorwegianGuy

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Re: Who's laughing now? Deals that looked stupid but turned out great
« Reply #12 on: October 23, 2015, 01:35:46 AM »
A friend of mine wanted me to join in on making a viral webpage (you know, all these websites sharing funny videos and stuff). I didnt join, thiking it would be a fail as all the thousands of other attempts of making viral websites out there... Already 3 months in, he made about 20 000 $ EVERY MONTH!! and he still do even though he only use about 1-2 hours a day at it. I think he laughts pretty well these days :) But the best part is that he have proclaimed for several years that he will live of the internet, with many people not believing him (I also believed he would succeed at it, but not this much).

dachs

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Re: Who's laughing now? Deals that looked stupid but turned out great
« Reply #13 on: October 23, 2015, 03:28:23 AM »
In 2014 BUNDS (German government bonds) outperformed the German Stock index (DAX), even though the interest rates are on a historic low. Who would have thought that? And stocks didn't perform horribly (+4%) that year.

HipGnosis

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Re: Who's laughing now? Deals that looked stupid but turned out great
« Reply #14 on: October 23, 2015, 06:49:31 AM »
Bitcoin. If I had bought $100 in Bitcoin when I first heard of it, I'd be retired right now. I thought it was just another scam, another way to separate fools from their money.
So you're saying you drastically underestimated how many fools there are in the world...

MandalayVA

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Re: Who's laughing now? Deals that looked stupid but turned out great
« Reply #15 on: October 23, 2015, 07:04:20 AM »
My dad bought the house in which I grew up in 1963 for $13,000.  People mocked him because the house was in a little farm town where you had to go to the next town over to go to the supermarket, movies, etc.  "Nobody wants to live there," he was told.  Over the years he added on and remodeled.  In the 1970s a subdivision called Clover Hill opened up that was geared for people like doctors and lawyers.  By the eighties, richer and richer people were moving into the town.  In the late eighties, three members of Bon Jovi were living there (one's still there as far as I know).  In the early nineties, Bruce Springsteen moved to a farm there.  Realtors selling houses in neighboring towns would advertise that the house was "close to prestigious (hometown)."  Dad retired in 1994, put the house on the market ... and it was snapped up for half a million.  Can you say "instant retirement fund?"  I knew that you could.

StacheInAFlash

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Re: Who's laughing now? Deals that looked stupid but turned out great
« Reply #16 on: October 23, 2015, 09:01:34 AM »
A lot of these are reminding me that taking a financial chance every now and again isn't a dumb idea. Keep most of your finances as safe as you can through tried and true methods but don't be afraid to make a gamble every now and again with some of your money (but not all!). Sure you might get burnt, but life is more fun when you risk it sometimes.

SunshineGirl

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Re: Who's laughing now? Deals that looked stupid but turned out great
« Reply #17 on: October 23, 2015, 09:11:28 AM »
We were just telling our teenage kids last night that one of the smartest things we did was use my husband's college scholarship money to buy a fourplex, back in the early/mid nineties, putting about $3K down on an 8% 30-year loan. It gave us cash flow our entire adult lives, allowed us to buy our family home in the best neighborhood, AND, as we later refinanced, we scheduled to have it paid off right as our kids go to college themselves. Thus, my husband's college scholarship money will be paying our kids' college tuition! That $3K has returned far more than double every year and will now help put our kids through college.

Kaikou

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Re: Who's laughing now? Deals that looked stupid but turned out great
« Reply #18 on: October 23, 2015, 09:58:17 AM »
.....

Paul der Krake

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Re: Who's laughing now? Deals that looked stupid but turned out great
« Reply #19 on: October 23, 2015, 10:18:47 AM »
Seward's purchase of Alaska. I'd like to see the ROI on that!
History is filled with stories like that. When nations start bartering over land and warfare, all bets are off.

I too dismissed BTC even though I heard of it at its very beginnings, but sending money to some exchange run in someone's basement didn't feel right. It still doesn't.

Rightflyer

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Re: Who's laughing now? Deals that looked stupid but turned out great
« Reply #20 on: October 23, 2015, 10:25:54 AM »
... but sending money to some exchange run in someone's basement didn't feel right. It still doesn't.

I agree with you. I still don't really understand it.

Kaspian

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Re: Who's laughing now? Deals that looked stupid but turned out great
« Reply #21 on: October 23, 2015, 11:31:08 AM »
In late 1990, I went into a punk bar, grabbed a beer, and asked a friend:

Me:  "Who's playing upstairs tonight?"
Him:  "Mudhoney."
Me:  "Really?  Wouldn't mind seeing them.  Who's opening?"
Him: "Some band called 'Nirvana'."
Me:  "Never heard of them.  How much is it?"
Him:  "$20."
Me: "$20?!  No way, forget it."

6 months later...  Doh!!  Tickets for Nirvana selling/scalping for $300+.  :(

realityinabox

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Re: Who's laughing now? Deals that looked stupid but turned out great
« Reply #22 on: October 23, 2015, 12:26:19 PM »
In high school Econ I did a report on Apple.  This was in 2005, pre-iPhone, when Apple's stock was in the single digits.  I thought about buying $1k of stock with some summer earnings.  I guess this is more a deal that looked stupid and now I feel stupid :-/

markbike528CBX

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Re: Who's laughing now? Deals that looked stupid but turned out great
« Reply #23 on: October 23, 2015, 01:08:16 PM »
In late 1990, I went into a punk bar, grabbed a beer, and asked a friend:

Me:  "Who's playing upstairs tonight?"
Him:  "Mudhoney."
Me:  "Really?  Wouldn't mind seeing them.  Who's opening?"
Him: "Some band called 'Nirvana'."
Me:  "Never heard of them.  How much is it?"
Him:  "$20."
Me: "$20?!  No way, forget it."

6 months later...  Doh!!  Tickets for Nirvana selling/scalping for $300+.  :(

Just to be argumentative, I don't think late 1990 was the time. 
According to https://www.ocf.berkeley.edu/~ptn/mudhoney/tourbook/1990.html, there were no Mudhoney/Nirvana shows.
1991 is possible, pretty good memory considering (Good God!!) 25 years have elapsed.

I saw Nirvana once, at the HUB ballroom, "4 bands, 4 bucks", but as a grad student I think I paid 6 bucks in 1989.
Mudhoney, Nirvana, and Weather Theater?.  I only remember Weather Theater because a female housemate had a crush on the lead singer and was quite vocal about it.   Nirvana was notable for smashing their stuff, not otherwise.

Signed,
Mudhoney fan since 1988.

ketchup

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Re: Who's laughing now? Deals that looked stupid but turned out great
« Reply #24 on: October 23, 2015, 01:49:55 PM »
In late 1990, I went into a punk bar, grabbed a beer, and asked a friend:

Me:  "Who's playing upstairs tonight?"
Him:  "Mudhoney."
Me:  "Really?  Wouldn't mind seeing them.  Who's opening?"
Him: "Some band called 'Nirvana'."
Me:  "Never heard of them.  How much is it?"
Him:  "$20."
Me: "$20?!  No way, forget it."

6 months later...  Doh!!  Tickets for Nirvana selling/scalping for $300+.  :(
Reminds me of when my dad was in college.  He and his friends had to pick between going to see some nobody guy playing at their school named Bruce Springsteen or go out for pizza.  They chose the pizza.

spud1987

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Re: Who's laughing now? Deals that looked stupid but turned out great
« Reply #25 on: October 23, 2015, 01:53:14 PM »
I'll add a current investment to the list. I bought call options with a Jan 17 expiration for CVX about two months ago when CVX's share price was $70 (its around $90 now). Obviously a risky bet, but they have more than doubled since then. I sold half of the options and I'll hold onto the other half for a few more months. I only bought $3k worth, and my capital gains with be subject to ordinary income tax since they are short term, but still a pretty good investment!

MrsPete

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Re: Who's laughing now? Deals that looked stupid but turned out great
« Reply #26 on: October 23, 2015, 02:55:18 PM »
Here's one:  My cousin and I graduated from high school the same year.  We both started college, but she dropped out without even finishing her first semester.  She went to work full-time at the fast food restaurant where she'd been working for about two years.  She quickly became manager, and I figured that was "tops" for her.  Nope.  Her restaurant was always the most efficient in her district, and her employees really toed the line.  It was because she's a complete and total bitch (only at work -- she's actually a nice person).  The regional office actually created a job for her. She was something a bit like the TV show Undercover Boss ... except that she went into the restaurants as a "new hire", worked for two weeks, then came in and fired everyone who wasn't working up to expectations.  She'd then stay in the restaurant as manager for six months to a year, turn it around, then move on to another victim.  They paid her a butt load of money to do this.  Of course, it was hard, physical work a low-status, unpleasant work environment, and she was required to move frequently. 

I'd still rather have taken my route through college, but she's done very well for herself -- and I thought she had made a major mistake. 


Carrie

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Re: Who's laughing now? Deals that looked stupid but turned out great
« Reply #27 on: October 23, 2015, 03:19:31 PM »
Year 2000, college field trip to NYC.  Classmates went to top of WTC, I didn't because $12 seemed too expensive.   Thought, I'll do it next time when I travel to NY with my spouse.  Doh!

FIRE me

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Re: Who's laughing now? Deals that looked stupid but turned out great
« Reply #28 on: October 23, 2015, 09:29:27 PM »
Bitcoin. If I had bought $100 in Bitcoin when I first heard of it, I'd be retired right now. I thought it was just another scam, another way to separate fools from their money.
So you're saying you drastically underestimated how many fools there are in the world...

Yes. And that was very foolish of me.   :-)

Bearded Man

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Re: Who's laughing now? Deals that looked stupid but turned out great
« Reply #29 on: October 23, 2015, 11:11:39 PM »
I wish I had money to invest in Google when they went public. 100K back then would be easily a million now.

And the Bitcoin crap too. It seemed like a scam, and I agree that it still seems like it, and I don't understand it. But man, what 1K just to see what happens would have done...1K is money I can easily afford to lose.

Purple Economist

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Re: Who's laughing now? Deals that looked stupid but turned out great
« Reply #30 on: October 23, 2015, 11:26:35 PM »
Trading prospects for Ben Zobrist.

One Noisy Cat

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Re: Who's laughing now? Deals that looked stupid but turned out great
« Reply #31 on: October 24, 2015, 06:55:50 AM »
     One of my favorite stories ever in "Playboy" (a magazine I bought for the pictures) was one by David Morrell. In 1972 he wrote the novel "First Blood" that created the character John Rambo. At the time the theme of a  Vietnam veteran with PTST was relatively new.  The book sold well and Morrell sold the movie rights but it took a decade and all kinds of different companies and people who tried to make a movie.
      Early on Morrell paid a lawyer $500 to deal with the fine points of the contract. For years Morrell figured it was wasted money because every so often the lawyer would call him with what seemed outlandish details.  "I got you profit participation in sequels" ("What sequels? Everyone dies in the novel') or "I got you a share of merchandising" ("Merchandise? Do you think school children will have Rambo lunch boxes?"). The lawyer would respond "you don't know what Hollywood will do with your film. For all we know, they may turn it into a Broadway musical. It's my job to anticipate this".
       Eventually Sylvester Stallone, whose non-Rocky films weren't successful, got involved. He made Rambo more sympathetic and didn't kill him off. Result: Morrell is now very wealthy thanks to lawyer.

rantk81

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Re: Who's laughing now? Deals that looked stupid but turned out great
« Reply #32 on: October 24, 2015, 06:57:03 AM »
In the deepest part of the housing crash in 2010, when nobody wanted to touch real estate with a 100-foot-pole and banks seemly wouldn't give loans to anyone to buy a condo, no matter what their credit and financial standing was --

I bought a foreclosed rental condo for 68K cash.  One bedroom, private garage parking, 2 blocks from the lakeshore park, 1 block from public transportation train line.  Been rented for at least $1200 nearly every month every since :D


bzzzt

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Re: Who's laughing now? Deals that looked stupid but turned out great
« Reply #33 on: October 24, 2015, 10:43:05 AM »
Pretty much the opposite, but my uncle has had a bunch of great ideas that were never worked through.

The two biggest were:

-the idea for quick oil change places back in the 60s.
-Cell phone companies sponsoring race cars (in the early '90s).

Oops...

bobechs

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Re: Who's laughing now? Deals that looked stupid but turned out great
« Reply #34 on: October 24, 2015, 11:38:45 AM »
That $3K has returned far more than double every year and will now help put our kids through college.

Three thousand dollars, doubled every year for twenty years (1995-2015), adds up to: one billion, five hundred seventy two million, eight hundred sixty four thousand dollars.  I know that can't possibly be what you meant, because... well, just because.  But it is what you said.

Don't worry though, because this forum is all about getting hinky with the numbers, mostly in order to amaze the rubes.

The math ain't hard;  http://www.al6400.com/blog/a-penny-doubled-everyday/

rocketpj

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Re: Who's laughing now? Deals that looked stupid but turned out great
« Reply #35 on: October 24, 2015, 02:52:58 PM »
Trading prospects for Ben Zobrist.

Dammit.  It was a good hit though.  Unlike the Moustakas 'home run' that followed.

/derailment

rocketpj

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Re: Who's laughing now? Deals that looked stupid but turned out great
« Reply #36 on: October 24, 2015, 02:59:18 PM »
I wish I had money to invest in Google when they went public. 100K back then would be easily a million now.

And the Bitcoin crap too. It seemed like a scam, and I agree that it still seems like it, and I don't understand it. But man, what 1K just to see what happens would have done...1K is money I can easily afford to lose.

My coworker and business partner was talking up Bitcoin a couple years ago.  He bought heavily, then went up 35x in a short period when there was a frenzy on it.  He sold some, made a bundle, but should have sold it all.  Of course I was way too cautious for that sort of risk.

soupcxan

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Re: Who's laughing now? Deals that looked stupid but turned out great
« Reply #37 on: October 24, 2015, 03:47:42 PM »
Straight from the "I'm not as clever as I think I am" department, and as a humble reminder that the future is unpredictable, let's discuss deals that looked awful on paper, yet turned out to be fantastic investments/ideas.

I'll start.

Back in April 2012, techies everywhere woke up to the news that Facebook had spent a cool BILLION dollars to buy Instagram, a photo application with no revenue that let you slap a filter on your smartphone camera and share it with your friends. Many techies screamed bubble. The internet erupted with Zuck memes.

A short 3 years later, Instagram is predicted to reach $500 million in revenue in 2015 alone, with projected growth topping the $2B mark by 2017. Not too shabby a return.

Your turn.

You're giving Instagram a lot of credit for predicted results 2 years from now. And profit is what matters, not revenue.

Bikesy

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Re: Who's laughing now? Deals that looked stupid but turned out great
« Reply #38 on: October 24, 2015, 05:49:23 PM »
Back in 2009 I was doing a case study on satellite radio for one of my college business classes.  At the time Sirius was expected to go belly up.  I think it traded as low as $.10 while I was in the class.  I remember telling my roommates we should each put in 10k since "all those satellites up there have gotta be worth something".  Obviously none of us invested, but today it trades at around $4 per share.  40 fold return in 6 years would've been pretty sweet!

beltim

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Re: Who's laughing now? Deals that looked stupid but turned out great
« Reply #39 on: October 24, 2015, 07:02:03 PM »
That $3K has returned far more than double every year and will now help put our kids through college.

Three thousand dollars, doubled every year for twenty years (1995-2015), adds up to: one billion, five hundred seventy two million, eight hundred sixty four thousand dollars.  I know that can't possibly be what you meant, because... well, just because.  But it is what you said.

Don't worry though, because this forum is all about getting hinky with the numbers, mostly in order to amaze the rubes.

The math ain't hard;  http://www.al6400.com/blog/a-penny-doubled-everyday/

Er.. no, that's not what she said.  She said the $3k has returned far more than double every year.  $3k x 2 = $6k per year.  So she's saying she's earned more than $6k every year.

There's nothing there to interpret it as compounding the way your interpreted it.  She quite clearly did not say it doubled in value every year.

Kaikou

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Re: Who's laughing now? Deals that looked stupid but turned out great
« Reply #40 on: October 24, 2015, 09:54:10 PM »
That $3K has returned far more than double every year and will now help put our kids through college.

Three thousand dollars, doubled every year for twenty years (1995-2015), adds up to: one billion, five hundred seventy two million, eight hundred sixty four thousand dollars.  I know that can't possibly be what you meant, because... well, just because.  But it is what you said.

Don't worry though, because this forum is all about getting hinky with the numbers, mostly in order to amaze the rubes.

The math ain't hard;  http://www.al6400.com/blog/a-penny-doubled-everyday/

Er.. no, that's not what she said.  She said the $3k has returned far more than double every year.  $3k x 2 = $6k per year.  So she's saying she's earned more than $6k every year.

There's nothing there to interpret it as compounding the way your interpreted it.  She quite clearly did not say it doubled in value every year.

lmao schooled!

golfreak12

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Re: Who's laughing now? Deals that looked stupid but turned out great
« Reply #41 on: October 24, 2015, 10:29:44 PM »
I wish I could say my Dad actually invested but...
My Dad's accountant told him of a local (Oak Brook) company that was a hamburger franchise, and he could invest in the ground level in a company that was rapidly expanding. My Dad scoffed, saying it only takes 5 minutes to cook a burger at home, there shouldn't be that big of demand for these restaurants. It was McDonalds.

 I have a better story about the subject.
I've been telling stories that I used to be GM for McDonalds become my buddy parents have quite a few McDonalds.
 His mom and stepdad, became franchise owner/operator in the early 80's in a small town of Fostoria, Ohio. They had 2 stores to begin with. They went to FLA for a owner convention and met this other owner that has 3 store in Central Florida. He told them that he might be interested to selling cause he wants to retire.
 Well, that owner called them later on and offer them his stores first. His stepdad hesitated because their roots are in Ohio and he didn't want to leave. His wife(real mom) convinced him to sell the stores in Ohio and move to Fla.
 So they bought the 3 stores and one of the store later on because one of the worlds largest and still hold the distinction of having the largest play land. In fact, they bought the land next to that Mcdonalds and rebuilding it to be even bigger.
  They now have 24 stores. They are rich many times over. I went with him on a road trip to Cedar point a few years ago and we swung by his old town of Fostoria, Ohio and there is nothing there. Needless to say, its was a great decision thanks to his mom urging.
« Last Edit: October 24, 2015, 10:31:41 PM by golfreak12 »

golfreak12

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Re: Who's laughing now? Deals that looked stupid but turned out great
« Reply #42 on: October 24, 2015, 10:49:38 PM »
 I don't have any deals that I thought looked stupid at the time but I had a couple of deals that mad me some good money.
 I think back in 2008, I had about $90K to my name. When the housing bubble was about to explode, I was lucky enough not to buy anything with the money I had even though I thought about it many times with money just sitting there. My buddy had an equity loan that he was paying something like 8% and I told him I can lend him what I had for 5%. I had no collateral but I known him for so long and his parents did own McDonalds so I did it anyway. He got rid of his other house for a big loss a year later and paid me back. Made an easy $4500, tax free.
 So about a year later, when house pricing was at its lowest I mad another deal. A friend of my buddy who I also knew asked him to lend money so he can buy a house with cash because he had bad credit. My buddy didn't have the money but told him that I had money. He wanted to by a house for $225K for cash. He had 50% of that and need 50%, thats $112K. He said that he will paid back $150K in 5 yrs or take the equity in 5 yrs. I had doubt that he can paid that much back in 5 yrs but he did have $150K and he was GM of a big time restaurant.  My stipulation was that I had to be on the title. I figure it was fool proof. After a few payments, I would be in the clear as I'm still 50% owner.
 He ended up paying me back all of it in 3 yrs(minus a $3K discount for paying back early). I remembered counting $87K worth of cash in the back of the car outside the title company right before I sign it over to him. Looking back, it was a great deal but damm, I should have taken 50% of equity. That house was in a great neighborhood and worth $400K right now. thats about $175K of equity divided in half.

Dollar Slice

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Re: Who's laughing now? Deals that looked stupid but turned out great
« Reply #43 on: October 24, 2015, 11:34:56 PM »
10+ years ago I was in Boston visiting some art galleries just for fun... no intention of buying anything. But I saw this painting that I really fell in love with. It was $5000 and I toyed with buying it even though it seemed ridiculously expensive to me (I probably had $10k in the bank outside of retirement accounts). Didn't buy it. What a waste of money that would be, right? Five grand just hanging on the wall getting dusty.

A year or two later I was visiting galleries on the same street again and they had another exhibit by the same artist. I had a little more money by then and I thought, heck, maybe I could afford one of the paintings now? I mean, it's extravagant, but... let's look. So I looked and their paintings were now selling for six figures :-(

stashing_it

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Re: Who's laughing now? Deals that looked stupid but turned out great
« Reply #44 on: October 25, 2015, 10:40:11 AM »
A friend of mine wanted me to join in on making a viral webpage (you know, all these websites sharing funny videos and stuff). I didnt join, thiking it would be a fail as all the thousands of other attempts of making viral websites out there... Already 3 months in, he made about 20 000 $ EVERY MONTH!! and he still do even though he only use about 1-2 hours a day at it. I think he laughts pretty well these days :) But the best part is that he have proclaimed for several years that he will live of the internet, with many people not believing him (I also believed he would succeed at it, but not this much).


I wouldn't mind knowing more about this

Threshkin

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Re: Who's laughing now? Deals that looked stupid but turned out great
« Reply #45 on: October 26, 2015, 03:08:16 PM »
You're giving Instagram a lot of credit for predicted results 2 years from now. And profit is what matters, not revenue.

Tell that to Amazon.

Paul der Krake

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Re: Who's laughing now? Deals that looked stupid but turned out great
« Reply #46 on: October 26, 2015, 03:23:03 PM »
Straight from the "I'm not as clever as I think I am" department, and as a humble reminder that the future is unpredictable, let's discuss deals that looked awful on paper, yet turned out to be fantastic investments/ideas.

I'll start.

Back in April 2012, techies everywhere woke up to the news that Facebook had spent a cool BILLION dollars to buy Instagram, a photo application with no revenue that let you slap a filter on your smartphone camera and share it with your friends. Many techies screamed bubble. The internet erupted with Zuck memes.

A short 3 years later, Instagram is predicted to reach $500 million in revenue in 2015 alone, with projected growth topping the $2B mark by 2017. Not too shabby a return.

Your turn.

You're giving Instagram a lot of credit for predicted results 2 years from now. And profit is what matters, not revenue.
I'm giving credit to the decision makers at Facebook for seeing an opportunity in a company that had 0 revenue at the time. You're right that ultimately profit trumps revenue, but I have a hard time imagining a scenario where Instagram doesn't slice out a hefty profit out that revenue pie.

midweststache

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Re: Who's laughing now? Deals that looked stupid but turned out great
« Reply #47 on: October 26, 2015, 05:02:06 PM »
My FIL is a coffee fanatic, and was mail-ordering coffee long before you could find anything but Folgers in your grocery story. He found a company he really like and got on their mailing list. A few years later, the company offered their mail-order clients an early opportunity to buy shares of stock before going public. He passed.

The company? Starbucks.

RWD

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Re: Who's laughing now? Deals that looked stupid but turned out great
« Reply #48 on: October 27, 2015, 07:48:27 AM »
My dad bought the house in which I grew up in 1963 for $13,000.  People mocked him because the house was in a little farm town where you had to go to the next town over to go to the supermarket, movies, etc.  "Nobody wants to live there," he was told.  Over the years he added on and remodeled.  In the 1970s a subdivision called Clover Hill opened up that was geared for people like doctors and lawyers.  By the eighties, richer and richer people were moving into the town.  In the late eighties, three members of Bon Jovi were living there (one's still there as far as I know).  In the early nineties, Bruce Springsteen moved to a farm there.  Realtors selling houses in neighboring towns would advertise that the house was "close to prestigious (hometown)."  Dad retired in 1994, put the house on the market ... and it was snapped up for half a million.  Can you say "instant retirement fund?"  I knew that you could.

That works out to 12.5% annual return on investment. Though I assume the remodeling wasn't free so the actual return would be less.