- [Narrator] The rich people of the world may drive around in cars
that look like spaceships and eat gold for fun, but at the end of the
day, they're humans too and, like all humans, they make mistakes. The only difference is
when you're extremely rich, your financial mistakes can
have extreme consequences. So, as both entertainment
and a lesson in finance, here are a few people who have
lost huge amounts of money. (ambient music) Number 10, Elon Musk. There are few things
worse than losing cash, to the back of the couch or otherwise. But on April 4th, 2019, Elon Musk lost an absurd amount of money in just two minutes. As far as anyone can tell,
there were no couches involved. When Tesla, Inc. shares dropped 11% within the
first two minutes of trading at the New York Stock Exchange, its CEO suffered a sting that would make a Japanese hornet wince, a loss of $1,000,000,000, since most of his wealth is tied up in shares he owns of his company. In the same time it takes
to microwave a Hot Pocket, he lost way more money than most of us will
earn in our entire lives. Luckily for Elon, this
1.1 billion dollar loss only cut his net worth down
to 22.3 billion dollars, so he'll probably still be able to pursue
his kooky ventures. But electric car giant Tesla's
position is more precarious, leading up to the drop, Tesla
has been in a record decline, dropping from 90,966 cars manufactured in the final quarter of 2018 to just 63,000 in the
first quarter of 2019. This failure to meet production targets was the main cause of the huge loss, though many suspected that
Elon's on-going legal problems may have played a big role in
spooking investors as well. Unfortunately for Musk,
in the following months, Tesla dropped a further 25%, meaning a loss of many
billions to his net worth following negative reports on
Tesla's stock from analysts. But, then again, what debt
collectors would chase Musk to Mars if he goes bust and
flees in a SpaceX rocket? Number nine, Nick Leeson. Unfortunately, some losses are never directly suffered
by the person responsible. This is exactly the case with Nick Leeson, an ex-broker who's best known for bringing down Barings Bank in 1995, which was then the oldest merchant bank
in the United Kingdom. Leeson regularly used a
strategy called doubling, wherein every time he would lose money, he would simply double
down on his next gamble in order to recoup the loss. If that sounds crazy to
you, that's because it is. While initially enjoying
significant success, Leeson eventually found
himself hiding losses by exploiting management flaws and making unauthorized and highly speculative financial decisions with the bank's money. Things were going fairly well for him until January 16th, 1995, when he placed something
known as a short straddle on Singapore and Tokyo stock exchanges. This was essentially a
high-loss-potential bet that those markets wouldn't
change drastically overnight. But the Kobe earthquake
hit on January 17th, which meant that the markets collapsed and Leeson was in deep trouble. He left a note on his
desk saying, "I'm sorry" and fled the country, leaving behind 1.4
billion dollars in losses. Unfortunately for Barings, this was twice their available capital and left them bankrupt. Leeson dodged the law for a while, but was eventually arrested in Germany. Barings, on the other hand, collapsed after two centuries in business. Number eight, Pablo
Escobar, infamous drug lord Pablo Escobar had a financial problem
that was difficult to solve. Due to the highly illegal
sources of his income, he couldn't just go put it all in a bank. So, he ended up storing huge
amounts of the cash he amassed in fields, rundown warehouses, and within the walls of
his associate's houses. In "The Accountant's Story, Inside the Violent World
of the Medellín Cartel", a book by Roberto Escobar, Pablo's chief accountant and brother, Roberto touches on the
specifics of the matter. In the book, he writes that Pablo had
so much cash laying around left subject to the elements, that he would simply write
off 10% of his yearly revenue because rats would eat it, it
would be destroyed by mold, or it would get water damaged. Based on how much money
he was reportedly making, this would mean he lost around
2.1 billion dollars yearly. I don't know whether they just had a taste
for the cash-money lifestyle, but that's probably the most
damage rats have ever caused since the black plague, too soon? (keyboard keys clacking) Number seven, Warren Buffett. You might be surprised to hear that the third wealthiest man on Earth has lost some of the most money. But the bigger the amount
invested in something, the harsher the losses if its value falls. Warren Buffet's company,
Berkshire Hathaway, which holds a stake worth
$52,000,0000,000 in Apple shares, lost 3.7 billion dollars
in a single day in 2018, when Apple stocks took a
historically bad nosedive. When the day was over,
the shares were down 6.6%. Apple's stock suffered as a
result of falling iPhone sales, which were attributed to their high prices versus competitors. I don't know what they're talking about, Apple are famous for their great value. I mean, only $1,000 for a monitor stand? What a steal! Regardless, Buffett and Apple didn't suffer too badly from the loss, as Apple's still worth $1,000,000,000,0000 and Buffett still sits on
a cool $85,000,000,000. Number six, John Meriwether. In 1994, John Meriwether created the Long-Term Capital
Management hedge fund. The fund was wildly successful in the four years that followed, eventually being responsible
for over $100,000,000,000. He claimed that their strategies, which promised to take advantage of temporary changes in market behavior, theoretically reduced the risk
level of their investments to zero. In 1998, a series of risky internal bets led to instability within the fund and investors began to get spooked. As many of the hedge fund's investments were related to foreign currency markets, financial crises in Asia and Russia seriously compounded the
fund's mounting issues, eventually leading to its collapse. John's fund lost $4,000,000,000 of its $4.7 billion in capital. Thanks to bailouts from the
government and a group of banks, the company was able to
liquidate successfully and return 3.6 billion
dollars to investors. Partners like Meriwether, however, bore the brunt of the losses. Number five, Brian Hunter. In 2005, Brian Hunter's
investment career was going great, thanks to the unexpected
help of Hurricane Katrina and Hurricane Rita. While people don't usually
think of hurricanes as being good for the market, they are for people like Brian Hunter, who gamble on natural gas futures. These hurricanes caused
the price of natural gas to skyrocket due to damaged refineries. Brian Hunter and the
hedge fund he worked for, Amaranth Advisors, earned well over $1,000,000,000 and a whole lot of new,
confident investors from the lucrative disasters. But the following year, anticipating an equally
devastating hurricane season, Hunter placed similar bets on
the natural gas prices rising. Only this time, the expected
hurricanes never came. The price of natural
gas went into free fall and Brian Hunter was responsible for
$6,000,000,000 in losses. Clearly, karma is more of a
renewable energy kind of guy, with a distaste for those
who profit from disasters. Number four, Jérôme Kerviel. While working as a trader
at the French bank, Société Générale, Jérôme Kerviel developed a nasty habit of playing dirty to increase his profits. By manipulating Société
Générale's data systems, he was able to carry out trades and bets with trading
partners who didn't exist. When the threat of discovery loomed near, Kerviel attempted to cover up the massive profits he'd
been making for himself through one-sided bets and fake trades, by intentionally causing massive losses. You might struggle to believe
it, but this did not work. Once word got out in early 2008, Kerviel's illegal rogue trading cost Société Générale 7.2 billion dollars, the worst loss from any
rogue trader in history. After his eventual arrest, while Kerviel was waiting
for a court ruling on his legal appeal, he met with Pope Francis at the Vatican. Reportedly, Kerviel sought
redemption from the guy, and wanted to try on his hat. Well, maybe not the second part. But the bizarre turn of events continued as Kerviel then went on a pilgrimage all the way from Rome to Paris to protest against what he referred to as the tyranny of the markets. Clearly, the tyranny of greedy bankers wasn't too much of a
pressing issue for Kerviel. To this day, he refuses to accept
responsibility for the loss. Number three, Mark Zuckerberg. You may know Mark Zuckerberg as the sixth richest person in the world, the founder of Facebook, and
personal-data salesperson. What you may not know is that he currently holds the record for the most individual wealth
ever lost in a single day. Between the 25th and 26th July 2018, the Zuckmeister lost a
whopping 15.9 billion dollars. To put that into perspective, that's almost double the
current brand value of KFC. The amount Zuck lost in a single day, when Facebook shares dropped 19%, was attributed to CFO
David Wehner's announcement regarding tighter business
margins going forward. The information startled investors and sparked a decline
that had been looming after Facebook's various
controversies that year. Though not directly, Mark's love of sharing
stranger's personal info like after-dinner mints
eventually came back to haunt him. The debacle knocked him from the third richest person in the world down a whole three spots, to merely the sixth richest, pathetic. Number two, Julian Robertson. Like many others on this list, things started off just
dandy for Julian Robertson. He founded the hedge fund firm,
Tiger Management, in 1980, and over the course of the next 16 years, he turned $8,000,000
into 7.2 billion dollars. Ending up with 900 times more money than you started out with ain't bad! But between 1998 and 2000, Robertson refused to board
the tech bubble hype-train, predicting it would soon collapse like a disappointing soufflé. Ultimately, he would prove to be right. However, his mistake was in
trying to short his tech stocks. Shorting stocks is essentially betting that a stock's value will
decrease, which is risky, as the losses are potentially unlimited. Unfortunately for Robertson, tech stocks continued to
rise for a considerable time before the bubble finally burst. While rivals made huge gains, Tiger Management suffered
losses of $17,000,000,000 and closed down in 2000. Before I reveal the
world's greatest loser, here are a few honorable
mentions whose losses, while not monetarily the highest, are just as jaw-dropping as the rest. For starters, there's Gerald Cotton. The Canadian cryptocurrency entrepreneur lost his money in an
unconventional way, by dying. But there was more misfortune
than death in Cotton's case, because his passing cost
investors in QuadrigaCX, Canada's largest cryptocurrency
exchange, $190,000,000. This was because all the
passwords for the crypto-wallets was only known to Cotton,
and never written down, so without him there was
no way of accessing it. Another face palm-worthy
case occurred in 1996, when Denise Rossi won
the California Lottery. Instead of telling her husband
like she probably should've, she kept it secret and
attempted to get a divorce with an expedited settlement. Unfortunately for Denise, her
husband eventually found out, and the court ruled that she'd failed to comply
with asset disclosure laws. She hadn't even disclosed her
winnings to her own attorney, who could have helped
her hold on to the cash had he been made aware during
the divorce proceedings. By default, as per the law, the husband received
the entire undisclosed 1.3 million dollar prize. There are worse ways to find out your partner is
hiding something from you, I suppose. Number one, Masayoshi Son. Masayoshi Son has the proud honor of being the person to lose the most money in recorded history. When the dotcom bubble
burst in the early 2000s, tech shares finally stopped skyrocketing and began plummeting, and Son lost approximately
$70,000,000,000. To put that into perspective for you, that's approximately 70% of
Bill Gate's current net worth. And from a perspective us
common folk can grapple with, working at the US federal
minimum wage of $7.25 an hour, you'd have to work more than
1,000,000,0000 9-hour shifts in order to earn the amount
of money that Masayoshi lost. That's just short of
3,000 years of pure work, and that's before tax! The burst of the dotcom
bubble hit Son hard, and by the end of 2000, the value of his company
SoftBank's shares had dropped 93%. But amazingly, in spite
of his colossal losses, Masayoshi is still the
richest man in Japan. And possibly the nicest one too, since, in 2011, he pledged
to donate his entire salary until his retirement to the victims of the 2011
Tōhoku earthquake and tsunami. Has this video made you
feel better or worse about your personal financial situation? And what's the most
money you've ever lost? Let me know in the comments section below. Thanks for watching! (playful music)
