My Worst Investment Ever Podcast William Cohan – Get the Numbers Right Before You Invest
BIO: William D. Cohan, a former senior Wall Street M&A investment banker for 17 years at Lazard Frères & Co., Merrill Lynch, and JPMorgan Chase, is the New York Times bestselling author of seven non-fiction narratives, including his most recent book called Power Failure: The Rise and Fall of an American Idol.
STORY: In 1990, William asked a trader to buy him 10 shares in Berkshire Hathaway, thinking a share was selling at $1,200, only to be told it was $12,000. He decided to keep two shares and sold the other eight. Had William invested $120,000 for the 10 shares in Berkshire Hathaway in 1990, they would be worth $7.4 million today.
LEARNING: Get the numbers right before you invest.
“I decided to write this book for people who wanted to know about how Wall Street works but were afraid to ask how things work.”
William Cohan
Guest profile
William D. Cohan, a former senior Wall Street M&A investment banker for 17 years at Lazard Frères & Co., Merrill Lynch, and JPMorgan Chase, is the New York Times bestselling author of seven non-fiction narratives, including his most recent book called Power Failure: The Rise and Fall of an American Idol.
Worst investment ever
In 1990, William was interested in buying some Berkshire Hathaway stock. The company he was working for at the time, Lazard, had a Quotron machine on each floor. William used the machine to get Berkshire’s stock price of the day and got $1,200 a share. William went down to the company’s trader and told him that he wanted to buy 10 shares of Berkshire Hathaway. William figured 1,200 x 10, that’s $12,000, and as a first-year associate, he didn’t have much money but figured he had 12,000 extra dollars to invest in Warren Buffett’s Berkshire Hathaway shares.
Twenty minutes later, the trader called William back, and he said the trade was done and to pay $120,000. William was in shock because he thought he was supposed to pay $12,000 and not $120,000. The trader explained that the Quotron machine only goes to four decimal points, so he’d gotten $1,200.
William didn’t have $120,000, so he decided to keep only two shares at $24,000. The trader sold the other eight back into the market. Now, 33 years later, the Berkshire Hathaway stock is trading for something like $540,000 a share. William’s two shares are now worth over a million dollars, and he only paid $24,000 for them, which is nice. But he also let go of eight shares. Had he invested $120,000 for the 10 shares in Berkshire Hathaway in 1990, they would be worth $7.4 million today.
Lessons learned
- Get the numbers right before you invest.
William’s recommendations
William recommends his books because he believes they’re great resources for learning about important events and companies on Wall Street.
No.1 goal for the next 12 months
William’s number one goal for the next 12 months is to continue writing his new book and the weekly writing assignments for POC.
Parting words
“Enjoy your life as much as you can. No one gets out alive.”
William Cohan
Connect with William Cohan
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- My Worst Investment Ever
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