Marc Faber's Biggest Mistake

Marc Faber's Biggest Mistake

The longtime Swiss fund manager Marc Faber has made a killing for years, making very pessimistic—but very correct—calls about the market, to the benefit of his $300 million fund. But by his own admission, "Dr. Doom" hasn't done so well in the friends department.

The 67-year-old, ponytailed investor recalled the time he invested $100,000 in a pal's publishing firm, only to discover that his friend had held the copyrights under his name, and not the company. The result: His (now former) friend more than doubled his money when he sold the rights five years later, while Faber only got his money back.

Faber also lent an old buddy $50,000 and never saw it again. "When you want to collect, people don't return emails, they don't call back," he said. Lesson learned: He now only makes family-friend loans that are backed by assets. He has done a lot better buying and keeping a host of memorabilia. Faber, who lives in Thailand and races around on motorbikes, began building a stash of Chairman Mao posters, badges and other collectibles in the '70s when Mao was close to death.

Regrets

I have always taken full responsibility for my actions and never blamed anybody else for what went wrong. As a result I have no regrets. However, lending money to friends has been a disappointing experience since neither has ever any of the money lent ever been returned nor did the friendship continue!

Once worth just a few cents each, some of the 330,000 badges he bought are now worth at least $150 apiece. But Faber is in no hurry to sell. "I don't need the money," he says. "It's an unusual collection, and I have a very large office."