Astonishing mistakes that proved incredibly costly!

Mick the Ram

Oct 14, 2022

Historically, there have been many quotes based around a similar theme, all of which basically suggest that a person who does not make any mistakes, never makes anything at all. There is some sense of truth in that thought process, basically suggesting that some times it is worth taking a chance on something, as it might just prove to be a master-stroke. However, there are several individuals who might strongly argue that belief, founded on the outcome of their own particular error of judgement, each of which had staggeringly costly consequences. 

The following have been guilty of some kind of colossal mistake, due either to overspending, undervaluing, gullibility, arrogance, accidental, or just plain bad luck; but in all instances, they seriously made the wrong call. Whatever the reason, the monetary value of the mistakes can be measured in millions, and even billions of dollars, together with the embarrassment, humiliation and in one particularly famous and critical world-shaping case, the eventual defeat, that followed it:

Professor’s precious assessment “drops” like a stone!

In the second part of the 19th century, there was great excitement around the region of Hopetown, in South Africa, amidst claims that diamonds were being found there. A farmer had rescued a “pretty pebble” from children playing in the area, after noticing that it looked markedly different from the others. This indeed transpired to be an actual diamond, with a considered value of around £500.

News filtered back to one of London’s leading diamond merchants, named Harry Emmanuel. In 1868, he secured the services of Professor James Reynolds Gregory, a celebrated and highly respected mineralogist and tasked him with undertaking a thorough investigation of the area, to determine if there were riches to be uncovered.

After extensive research, he concluded that the story was completely false and added that if any genuine diamonds were discovered in the region, they were probably carried in the gizzards of ostriches, from faraway lands and deposited in their droppings. Shortly afterwards, experts examined a stone that Gregory had dismissed as worthless and declared it to be a magnificent white diamond of 83.5 carats, which later became known as the “Star of South Africa”. The area subsequently received its first mining investment and the rest, as they say, is history.

The whole affair was acutely embarrassing for the Professor because thereafter, any sort of bad judgements, or questionable statements, were referred to as “pulling a Gregory” in contempt of his entirely inaccurate appraisal.

Poisson gets an “Eiffel” of embarrassment!

It seems quite extraordinary to believe that somebody could be fooled into thinking they had bought one of the most iconic landmarks anywhere in the world; but that is exactly what happened to a French businessman named Andre Poisson. In Paris, in the spring of 1925, he was invited, along with four other representatives from leading iron salvage companies, to tender a bid for the scrap iron value of… the Eiffel Tower!

The invitation had come from Victor Lustig, who at that time, was one of America’s most dangerous confidence tricksters. Posing as a government official, he explained in a totally convincing presentation, that due to enormous maintenance and repair costs, the dismantling of the tower was the only option and therefore, it was to be sold to the highest bidder.

The businessmen were asked to respect confidentiality and proceed with their bids with the uppermost discretion, to avoid a potential public outcry at the demise of the city’s most famous structure. At a second meeting, Poisson was offered a bribe by Lustig to guarantee him the contract, but instead of raising alarm bells, this actually convinced Poisson (fish in French!) to take the bait,  as he believed it was common knowledge that many French Ministry workers were openly corrupt. 

Upon receipt of the money, understood to be around 100,000 francs, Lustig fled to Vienna, whilst Poisson, when eventually realising his incredible gullibility, was too embarrassed and ashamed to report the fraud, for fear of ruining his own reputation.

Wayne’s opt-out cuts to the core!

The names Steve Jobs and Steve Wozniak are well known world wide, as the co-founders of the giant Apple Corporation. Initially however, a third individual named Ronald Wayne was involved, with the role to oversee electro-mechanical engineering and product development. For this he received a 10% stake, but with nagging doubts and underlying concerns, he decided quite quickly, to cash in for a healthy return of $800.

He returned to the simple life, even running a stamp shop for a while, but had he stayed, his stake would now be worth more than $100 billion, easily earning him a place in the world’s rich list. He claims he has no regrets and simply made what he considered to be the best decision, based on the information he had available to himself at that point in time. Yeah right!

Security company learns its not so good to share!

In most white collar working environments, any simple typing error can be rectified by a straightforward alteration, or at worst a grovelling apology. However, in the world of the Tokyo Stock Exchange neither of those will do, as one unfortunate trader found out, at a staggering cost of $295 million to his company.

In 2005, a stockbroker at Mizuho Securities had meant to sell one share at 610,000 yen, but unfortunately he had the digits the wrong way around, meaning that well over half a million shares were sold for less than one penny!

Upon immediately realising the error, the broker attempted to withdraw the order on four separate occasions, but it became apparent that any transactions are irreversible and as a consequence, nothing could be done. The career path of that particular trader probably took a different course thereafter!

Brabazon’s flight of fancy to the scrapyard!

There is something very British about committing to a multi-million pound luxury project, whilst your country is in the middle of a global war. That is exactly what air pioneer Lord John Brabazon persuaded the powers that be to agree to, in the spring of 1943, when he started out on the prototype of a giant airliner, capable of carrying passengers non-stop from London to New York.

Built in the city of Bristol, it took the name of the “Bristol Brabazon” and had an enormous 230 foot wingspan, weighed a hefty 70 tons empty and had engine capacity of an astonishing 20,000 horse power. Innovative developments such as pressurized cabins, sleeper berths, a cocktail bar and a cinema were all added; basically, it was luxurious in the extreme. Unfortunately, it was only affordable for a very limited few, especially as rationing was still very much part of the English way of life, despite the end of hostilities.

Then it became known that the aircraft was suffering from metal fatigue and had no more than a two year lifespan. By 1953 the project had been abandoned, having cost around £12.5 million and the plane was sold for scrap for just £10,000 after a decision was made not to even preserve it even in a museum.

Hiker shows “flare” for disaster!

In 2003, Sergio Martinez found himself lost in the Cedar Creek Falls area, of the Cleveland National Forest, after going for an unplanned hike. Disoriented and dehydrated, he set off a flare, but unfortunately he fired it straight into the clump of trees, causing them to catch alight almost immediately. The flames gathered incredible speed, as the fire set off on a devastating journey, destroying everything in its path, backed by high winds coming in from the desert.

Tens of thousands of people lost power and communication along the way and when the burning finally was brought under control, a full week after the initial incident, the toll of destruction delivered by the fire, made pretty grim reading. 16 people had lost their lives, over 2,400 homes were in ruins, 273,000 acres of land had been destroyed, with an estimated cost to the state of $1.7 billion in damages.

I’m guessing Mr Martinez thought twice before setting off on his next hike!               .

A “Blockbuster” of missed opportunities!

If ever an example of a business failing to adapt to a changing world was needed, look no further than the once enormous DVD rental company Blockbuster. Its CEO John Antioco turned down the opportunity in 2000, to purchase all the assets of Netflix, for just $50 million. Reed Hastings and Marc Randolph, co-founders of the enormous media service provider, stated that Antioco rejected their offer with a “dismissive arrogance”.

Netflix are now estimated to be worth around $102 billion and still growing rapidly. Blockbuster went bust! What is it they say? “Pride comes before a fall!”

The publishers “potty” billion dollar rejection! 

Hindsight, is as they say, a wonderful thing and how much must a dozen publishers, back in the mid 1990’s, wish it was available to them right back then. A struggling author had tried unsuccessfully on twelve occasions, to get her fantasy novel published, before eventually being given a chance. The writer was JK Rowling and of course the book was Harry Potter!

That book and all the sequels, films, merchandise etc., have made her incredibly wealthy and the publisher who gave her the hand up, didn’t do too badly out of it either! As for those who disregarded the story and concluded it wouldn’t be commercially successful, well they are quite possibly suffering from a bad case of the “Deathly Hallows!”

Perfection in deception turns the tide on Hitler!

The second World War was full of many deceptions from both sides, each trying to gain the advantage that would swing victory their way. By April 1943, the Allied forces had taken back North Africa and now wanted to get a foothold back into mainland Europe. The obvious route was through Italy, but this was heavily protected; so Operation Mincemeat was devised to fool the Nazis into thinking the offensive would come up through Greece instead.

In an incredibly elaborate plot, the body of a dead tramp, named Glyndwr Michael, was transformed into that of a British officer, who was carrying secret documents in a briefcase, which was chained to his wrist. Inside were detailed plans for the “invasion of Greece”. The corpse washed ashore in southern Spain and found its way to a German spy in the neutral country. The contents were passed up the chain of command, right the way to Adolf Hitler. He fell for it and subsequently sent huge numbers of troops, tank divisions and torpedo boats, in completely the wrong direction.

Meanwhile the allies took Sicily and then eventually, Italy too. There was resistance and casualties, but the losses were a fraction of what they would have been, had the deception not been a success. The course of the war had swung away from the Germans, thanks in a large part, to their leader making a costly wrong decision, formed from information that was effectively, sourced from a British vagrant!   

Search is on for more Excite-ment than Google!

Who in their right mind, would turn down an opportunity to purchase Google? Step forward George Bell, the then CEO of Excite, who back in the late 1990’s, were second only to Yahoo in the search engine world. In the early part of 1999, he was presented with deal to buy for a mere $750,000 a new start up company, but Bell wasn’t interested.

That company was less than 6 months old, but had been widely praised for being more technologically innovative and was called… Google. Recently its parent company Alphabet, passed the one Trillion mark in value! Excite was acquired by Ask Jeeves (remember them?) in 2004. As for George Bell, he’s probably still “searching” for a valid excuse for turning his back on a vast fortune!


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