The Easiest Investments Ever Made
While it is said that there is no such thing as easy money, there have certainly been instances where investments have led to huge payoffs. Investors can luck out by being in the right place at the right time, correctly predicting trends, or having the foresight to see the future value of collectibles. Regardless of how these investments were crafted, here are some examples of the easiest investments ever made. TUTORIAL: Investing 101
Many investors purchase stocks with the objective of earning dividends while quietly growing wealth. The buy and hold investment strategy has been proven to work well towards achieving these goals. Every now and then, however, a stock has made remarkable gains over a relatively short amount of time, resulting in impressive gains for those investors who were savvy (or lucky) enough to have bought at the right time and, in some cases, sold at the right time. These memorable stocks include:
Google's initial public offering (IPO) took place on August 19, 2004. More than 19 million shares were offered at a price of $85. The stock performed well, reaching $700 per share in the third quarter of 2007. Investors who got in early could have enjoyed 800% gains in three years on their investments. While Google has fallen off from those highs, it remains a valuable and heavily traded stock. (For more about Google, see 5 Surprising Companies Google Owns.)
VA Linux Systems (formerly NYSE:LNUX)
In December of 1999, VA Linux Systems, a tech company that combined Linux, Intel-based software and open-source software had its IPO. Shares were initially offered at $30, and rose to a high of $320 on the first trading day, closing at $239.25. This was a record one-day percentage gain for Wall Street: 697.5% trading under a volume of 7.68 million shares. Investors would have had to sell their shares quickly, however. LNUX traded below its $30 IPO price within four months of its initial public offering.
Priceline runs a travel-related website that helps users find discount rates and name their own prices on hotels and airfares. While Priceline performed well following its March, 1999 IPO, jumping from $16 to $86.25 during the first trading day, it fell dramatically in price over the next couple of years. Investors who gave PCLN another shot in 2003 and held on would have been pleasantly surprised: shares went from less than $10 to more than $550 in May, 2011 - a greater than 5,000% return.
It's hard to imagine that any of the world's great artists was ever starving, yet Vincent van Gogh, for example, sold only one painting during his lifetime. Works by masters like Rembrandt and Picasso have sold for millions. Modern-day artists, too, have also had their works fetch record numbers among the elite crowd of fine art investors. (For more, see Fine Art Can Be A Fine Investment.)
Roy Lichtenstein (1923-1997)
This important American pop artist who gained famed for his comic-book style art. His painting "Torpedo…Los!" was sold in 1989 at Christie's for a then-record sum of $5.5 million. This made Lichtenstein one of only a few living artists to have ever attracted such prices for their works. The piece was privately sold less than 10 years later for around $14 million.
Jackson Pollock (1912 - 1956)
A prominent American painter, Pollock was important to the abstract movement. David Geffen (founder of Geffen Records) sold his Jackson Pollock "No. 5, 1948" for a record $140 million in 2006, though there is some controversy over the alleged purchaser of the great work. The piece has changed hands several times over the years after being sold by the artist himself in 1948 for $1,500.
Real estate has had the reputation of always being a sound investment - until a few years ago. "They're not making any more of it", was the saying that helped drive prices up until the economic crisis of 2008. Flipping properties for huge profits was easy money for real estate investors with an eye for improvements and a keen business sense. The biggest real estate deals, however, have notoriously been in New York City, where even tiny lots can bring in billions. (For more on flipping, see Flipping Houses: Is It Better Than Buy And Hold?)
General Motors Building
This building sits on less than a third of an acre, illustrating the veracity of location, location, location. The 50-story building sold in 2008 to Boston Properties, Goldman Sachs and Meraas Capital for $2.8 billion. The Macklowe Organization was forced to sell following the credit crisis. Macklowe purchased the GM Building from Donald Trump and Conseco Inc in 2003 for a then-record $1.4 billion.
Goldman Sachs Group purchased Rockefeller Center, home to Radio City Music Hall and the Bank of America Building, in 1996 for $900 million. The complex, which sits on 22 acres, was sold by Goldman Sachs and Tishman-Speyer four years later to Lester Crown for $1.85 billion.
666 5th Avenue
In 2000, Tishman Speyer Properties bought 666 5th Avenue, a 41-story office building in Manhattan, for $518 million. Tishman also purchased the Rockefeller Center at about the same time. Seven years later, the building sold to Kushner Properties for $1.8 billion, a record price for an individual building in Manhattan.
Other collectibles, including comic books, super hero figures and sports memorabilia, have generated impressive rates of return on investments. For example, the 1939 comic book, Detective Comics #27, was the first edition to feature the soon-to-be famous Batman. In 2010 it was purchased for $1.75 million through Heritage Auction Galleries by an anonymous buyer. The seller reportedly bought it 40 years ago for $100, and the comic cost 10 cents in 1939. (For more on collectibles, see 6 Major Collectible Payoffs.)
TUTORIAL: 20 Investments: Collectibles
The Bottom Line
A variety of investments can lead to big pay-offs, from stocks and fine art, to real estate and comic books. While many investors would have been able to get in on Google during its IPO, very few would have been in the situation to purchase prime Manhattan real estate. Unfortunately, it is the exception, and not the norm, to have investments generate such enviable returns. Being in the right place at the right time, and having a deep understanding of a given market - whether it is fine art, stocks or real estate - can create opportunities for a lucky few. (These world-changing events are rare and difficult to predict, but the implications for your investments need to be taken seriously. For more, see Black Swan Events And Investment.)
At the time of publication, Jean Folger did not own stock in any company mentioned in this column.