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Comment by palish | Hacker News Reader

Does anyone know of any balls-out investments that paid off (or didn't)?

(I'm referring to "if this investment doesn't pay off, I'm jumping out a window" risk.)

I'm just looking for interesting stories, and that sounds promising.

Here's one that went the other way: Nick Leeson had been accumulating losses from unauthorized bad trades. He attempted to cover his losses with a massive wager that the Tokyo stock market would not move overnight. Alas, the Kobe earthquake hit him!

The beginning of the end occurred on 16 January 1995, when Leeson placed a short straddle in the Singapore and Tokyo stock exchanges, essentially betting that the Japanese stock market would not move significantly overnight. However, the Kobe earthquake hit early in the morning on 17 January, sending Asian markets, and Leeson's trading positions, into a tailspin. Leeson attempted to recoup his losses by making a series of increasingly risky new trades (using a Long-Long Future Arbitrage), this time betting that the Nikkei Stock Average would make a rapid recovery. However, the recovery failed to materialize.

http://en.wikipedia.org/wiki/Nick_Leeson

Here's the thing: due to the nonlinear value of money, if you're betting that something is going up massively then you're pretty much just as well off betting some of your money as you are betting all of it.

If I have ten million dollars, and I really think that tulip bulbs are going to go up by a factor of a thousand, it's still dumb to invest all my money in it hoping to get ten billion dollars. Instead, I invest half my money in it, because the difference between having five billion dollars and ten billion dollars is (in practical terms) small, whereas on the losing side the difference between having five million dollars and being completely broke is very large.

There's one exception to this: entrepreneurs frequently put all their money into their own company. Why? Because nobody else will, and because if the company doesn't get that money then the company will collapse. Wise? Maybe, maybe not, but it's wiser than sticking all your money in some random asset which, if not bought by you, would be bought by somebody else.

George Soros shorted $10 billion worth of British Pound and then made $1 billion in a single day. I don't know what would have happened if things had gone the other way but I think he was mostly-in, if not all-in.

Bob Parsons had already made tens of millions from an earlier startup, and he put all of his money into starting up GoDaddy, to the point where he would have been broke if it had been failed and he was almost out of funds to keep it going, before it turned profitable.

He wrote an article about it but I can't find it right now.

Good interview which goes into this. http://www.npost.com/blog/2005/12/07/interview-with-bob-pars...

Those stories could be made any day. Take any volatile stock and stake out an extremely leveraged position on it for a day (or a few hours). If the stock moves in the direction you've bet, then congratulations, you've just made a bunch of money on a gamble. If not, you've lost everything.

I was asking for specific examples that have already happened. The point is to hear a fun story, not to learn any valuable or deep insights.

Here you have: Betting $136k on one roulette spin http://www.youtube.com/watch?v=1jBbE7neKT8

Seems to happen a lot with bigwigs.

Soros shorting the pound. Buffett investing in Visa.

Bitcoin is going to go through the roof, speculators or not. The guy in the article is taking a calculated bet that will pay off.

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