Thursday, January 08, 2009

The suicide of a four-times billionaire

Dennis Mangan links to a news report about the suicide of 74-year-old German investor Adolf Merckle, previously accounted by Forbes to have a net worth of around $9.2 billion, whose losses in the stock market were capped by his taking a bath on an ill-timed shorting of Volkswagen.

Dennis estimates that Merckle was probably down to $4 billion to $5 billion when he packed up.

Even if he had set out to spend like no one has ever spent before, Merckle would likely have sailed through the rest of his days with fewer financial worries than about 5,999,999,900 other members of his species currently inhabiting the planet. Would that not have offered him enough consolation to carry on with the experiment in living that we are all part of?


Dennis says, "
Somehow it doesn't seem that losing so much money that you might be kicked out of the Forbes 400 is a good reason to kill yourself. I do think that it illustrates investors' known aversion to losses. Normally, losses make twice the impact on investors as do profits." He also speculates that Merckle's age might have been a factor in his deciding it was time to close the book.

Feeling a sharp pain in the region of the bank statement is bad for anyone's morale, but I doubt that a few billion dollars disappearing into the aether is really what drove the gentleman to Selbst-mord. For many years now, money in itself has probably been almost meaningless to him, something taken for granted.

His departure is a reminder of something we tend to forget, or not realize, when we think about money. When you acquire lots of it, you almost automatically enter a world whose customs, values, and social world are defined by the way you made the money.


If you get rich by operating a successful chain of dry cleaning operations, your life will be centered around dry cleaning economics, management, and technology; your acquaintances will be mostly dry cleaning operation owners or suppliers; if you go to a convention, it will be a convention of dry cleaning store owners. If you make your dosh as a fashion designer, you will not know many spacecraft engineers or history professors, and you will be expected to dress like a fashionista whenever you appear in public.

Even if your genes are worth millions, your social circle will almost certainly include a lot of trust funders and and your calendar will be full of charity events.

For Merckle, and most high-end investors, the money is beside the point. It's just a way of keeping score. Among his cronies, the prestige is in making money, not having it. A shrewd investment move that pays off big time means you're an all-star player. Losing big, no matter how much is left to cushion the fall, means you're a dunce. Four billion bucks to your name and you can't hold your head up in public.


While I don't know anything about his personal life, it is unlikely that his friends, dining companions, wife or lover were quick to console Merckle by reminding him that he could still enjoy great art, music, literature, and other cultural pursuits to his heart's content.

And there is the age factor. At 74, any intelligent person — and it has to be assumed that Merckle was bright, at least in one dimension of intelligence — knows that, as the saying goes, you can't take it with you.

But at my back I always hear
Time's winged chariot hurrying near;
And yonder all before us lie
Deserts of vast eternity.
— Andrew Marvell

The life of the mind, the inner felicities, true love, perhaps even the winds of Spirit may be more easily accessible to those not burdened with great wealth.


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