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Was it Worth It

I was just scanning this little piece on Raj Rajaratnam the billionaire who has just been found guilty of insider trading. It states that he made around $60 million over about six years by using his highly placed network. This raises the question of if you are worth a billionaire bucks is a further $60 million worth the prospect of up to 19 years in prison.

Consider it this way, if you had $1 billion in the bank in a term deposit paying 4% that’s $40 million in interest a year and assuming no compounding this is $240 million over a six year period. So this clown actually made less over the period in question using inside information than if he had simply left the money in the bank.

So he has effectively foregone $180 million so he could win the chance of being nervous whilst showering with big hairy men.  I suppose the one consolation is that being a billionaire you can buy a lot of soap on a rope and one of these .

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Comments

  1. Brendan says:

    I wonder if any of his Billion bucks was accrued the same way?

    • Probably not a lot – in one of the few instances I would agree with Warren Buffet is that the way to accumulate a million dollars is to start with a billion and use inside information.

      Every tip I have ever seen both in my days as a broker and beyond has been a bust.

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