The 7 Greatest Investments of All Time

Sun, Aug 24, 2014

Financial Advice, Investment

Truly great investments tend to make household names out of business people and entrepreneurs who would normally be fairly anonymous. Names like Warren Buffet and Mark Cuban are nearly as familiar as the names of Hollywood actors and star athletes.

But, the companies that these financial phenoms invested in aren’t always so well known. For many, this is the precise reason these investors were able to capitalize on ROIs reaching up to 1,000 times the amount they put in.

So, what does it take to get a Mark Cuban sized return, and how long will it take? Better yet, who are these brilliant business minds and what are the companies that put them on the map?

By taking a look at 7 of the greatest investments of all time, we may learn a thing or two.

7. Warren Buffet & See’s Candy

In 1921 Charles See, along with his mother and wife, founded See’s Candy, a terribly wholesome California candy company. The company continued to grow and adapt with the times throughout the middle of the 20th century. In 1972, Warren Buffet saw the potential in this profitable biz – it wasn’t glamorous or trendy, but that didn’t matter.

He purchased the company through his Berkshire Hathaway Inc., which he now says was the first really good investment the company made. In 1972, Warren Buffet spent $25 million (equivalent to about 135 million today) to acquire See’s Candy and his staggering ROI is already over $1.35 billion dollars to date. With a return like that, it’s no surprise that he still owns the company today.

The 7 Greatest Investments of All Time

Trans World Airlines was founded in 1925, not long after the birth of commercial aviation. By the 1930s TWA was one of the “Big Four” airlines including American, United, and Eastern. But it wasn’t always smooth sailing for the company – the 30s brought events like high-profile crashes and scandals with air mail delivery.

In the late 30s, then owners Jack Frye and the Lehman brothers convinced Howard Hughes to take a controlling interest in the company with a $7 million (113 million today) investment. Unlike some investors, Hughes took a very active role in the company and had a mind in developing new planes and involving the company in WWII. In 1960, however, a long lawsuit led to Hughes giving up his shares and still walking away with $550 million dollars – not a bad return on his initial $7 million.

5. Ray Kroc & McDonald’s

By the 1950s, burgers and fries had become an indispensable part of the American diet and cultural lexicon, but they were still being served only by independent restaurants. I958, though, a little burger and fry joint in San Bernadino, California got the attention of milkshake machine salesman Ray Kroc. When he looked into what the McDonald brothers were doing, he decided he wanted to be a part of it.

After working for the brothers as a franchising agent for several years, he became frustrated at their unwillingness to expand and paid them $2.7 million (20.4 million today) to take over the company. It was Kroc who turned the business into what it is today, and by the time he died in 1984, the company was worth $8 billion and his personal fortune was $500 million.

4. Henry Flagler & Standard Oil

It’s no secret to anyone that oil is an insanely valuable commodity, but back in 1867 not many people thought of it as the biggest natural resource out there. The only man who did was Henry Flagler who invested $100,000 (1.6 million today) in Standard Oil. Flagler joined forces with John D. Rockefeller to make oil a $1.7 billion industry by 1913.

And this doesn’t even include the $50 million he used to create railroads and hotels throughout America! His total ROI was 707 times his original investment – a rate that would astound even the most successful investors today.

3. Peter Thiel & Facebook

In 2005, about the time when Mark Zuckerberg was still figuring out what the heck Facebook even was, Peter Thiel invested $500,000 in the tech start up. If you can recall, in 2005 Facebook was still called The Facebook and was only open to college students with .edu e-mail addresses.

But Thiel, the founder of PayPal, could see what the future would hold for Zuckerberg and Facebook. He only bought 10% of the company for a measly half of a million dollars, but that was all he needed to do for a company that was on the verge of exploding onto the scene. In 2012 Thiel sold 80% of his shares making $400 million dollars, a return 800x the amount he invested.

2. Asa Candler & Coca Cola

Colonial John Pemberton created the idea of Coca Cola after he became addicted to morphine because of its importance in war injuries. Pemberton had the drink sold at Jacob’s Pharmacy in Atlanta and said it cured morphine addictions, headaches, and more.

After a while Pemberton and his sons sold the company/formula to Asa Candler because of Pemberton’s health issues and immediate need for money. Asa Candler paid $2,300 ($58,000 today) for Coca Cola and sold it for $25 million ($332 million today) in 1923, a ROI 833x the amount of the original investment.

1. John Gray & Ford Motor Co.

John Gray, president of the German-American savings bank, sort of lucked into this staggeringly good investment. His nephew, Alexander Y. Malcomson, formed the car company with Henry Ford, but were soon in financial trouble due to lack of payment to the Dodge brothers, who had provided parts.

They turned to Gray for an investment, knowing his involvement would help draw other investors. They were right. Gray didn’t really personally see the benefits of the investment, but his heirs benefited largely when Ford bought the stock from the family in 1919 for $26.25 million (1.8 billion today), a ROI 1,300x the amount of the original investment.

Many of these investors were willing to take a risk with a little-known, sometimes even fledgling, company. But they had seen something that made them think that questionable status would soon change.

It’s fair to say that most people can’t spot a brand like Coca Cola, or Facebook, but if you think you may have found the next big thing, the lesson here is that you just might be right.

If all this sounds too risky, try this advice:

Author Bio: Andrew May is the founder of May Law PC and a top Chicago FINRA Lawyer. In addition to his legal work in securities, commodities and business, Andrew contributes to several online publications and covers a wide range of business and financial topics. For more, click here and connect on Google+.

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