
Did Peter Thiel Make The Single Best Investment In History? - turoczy
http://chrisyeh.blogspot.com/2010/09/did-peter-thiel-make-single-best.html
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1va
> That's a 6,000x return on his capital in 5 years. > I'll put it this way--if
> you made a $250 IRA contribution in 2005, it would have to be worth
> $1,500,000 today to match that return.

If you invested one penny that investment would now need to be worth $60 to
match that return. Maybe it is just me, but $250 to $1.5M doesn't help me
visualize a 6000x return at all. This analogy reminds me of an old Dennis
Miller bit from Saturday Night Live where to illustrate the size of the
national debt he takes out a dollar bill and says "it would take stack of
these 3 trillion high to pay it back".

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ghshephard
I'll point out the blindingly obvious that nobody else can bring themselves to
point out - future rounds have likely reduced that original 10% to a somewhat
smaller number. There is also a pretty good chance that Thiel has taken some
off the table, further reducing his stake.

Still a great investment.

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staunch
You're right about dilution, but it's very unlikely that he's taken money out.

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ghshephard
Interesting - Facebook has had a pretty active secondary market - I've had a
couple opportunities to invest, but couldn't afford the minimum buy in. What's
your information that he hasn't taken some off the table? Seems like a
reasonable move once it went north of $10 Billion.

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rms
Thiel doesn't need the liquid money and has no reason not to signal that he
values the stock extremely highly.

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bl4k
That is not the issue with him obviously, but a few reasons why he would sell:

a) bring liquidity to the secondary market

b) realize some of his gains and book them for his funds figures for this year

c) hedge against facebook being at its peak. so eg. if he believes that there
is a 10% chance facebook is at its peak now, he can then work out what % to
sell to realize max gains based on risk assessment (Thiel is after all a hedge
fund manager).

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rmorrison
It's not the best investment in history: there are people who have won more
than $100,000,000 on a single $1 lottery ticket.

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ww520
What happened to the guys who bought Manhattan for beads way back? Did they
make it ok?

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BerislavLopac
Not quite -- they were expunged by the Brits a few years later... ;)

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ankimal
I think Ram Shriram's Google investment was probably better. Here is a list of
some more [http://www.suite101.com/content/greatest-venture-capital-
inv...](http://www.suite101.com/content/greatest-venture-capital-investments-
ever-electricity-and-google-a257793).

Also, there is some debate over the $24 the dutch bought Manhattan for from
the Indians. Jury is still out on that one.

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rms
Yup, as article commenters point out, this blog post is wrong for comparing
Google VCs to a Facebook angel investor instead of comparing the Google angel
investors.

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aseem
Do people really believe that if Facebook goes public that it will be worth
more than Google when it went public? I want to know the details of how people
(i.e. Forbes Magazine) came up with the $33B valuation.

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riffer
It's not that he made one of the best investments in history.

It's that he has one of the best investment processes.

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kiba
How do we know that if he got very lucky or that he's very good at what he do?

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bl4k
because it's Peter frickin' Thiel - <http://en.wikipedia.org/wiki/Peter_Thiel>

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patrickgzill
Is there a Peter Thiel Facts Page, like there is for Chuck Norris? No?

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deltapoint
There is Ron Conway facts though

<http://twitter.com/ronconwayfacts>

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btucker
If I had $500K lying around in Fall '04 I would have been chasing down Mark
Zuckerberg trying to get him to take it for whatever tiny piece of the company
I could get.

Being at one of the first set of "facebook schools" it was very clear where
things were headed. The amount of mindshare facebook had on campus within the
first couple weeks of the semester was absolutely staggering.

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wyclif
Problem: Facebook is not worth $33 billion:
[http://37signals.com/svn/posts/2585-facebook-is-not-
worth-33...](http://37signals.com/svn/posts/2585-facebook-is-not-
worth-33000000000)

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aberkowitz
The keyword here is "estimated value". It is very likely that Peter Thiel did
very well, but a 2-3 billion dollar return is not guaranteed.

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gojomo
You're right... but it could also be more!

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aberkowitz
Good point; thanks for opening my mind to further possibilities. Either way,
it's either underly or overly sensational at the moment.

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huhtenberg
> _Today ... his stake is worth between $2-3 billion_

That's 2-3 billion _Zuckerbucks_ as some banking people call 'em :)

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bretthellman
Time will tell. At this time... it's safe to say it wasn't the worst
investment.

