You had to work hard to blow a fortune this year.
Stocks, of course, continued a bull-run stampede that began in 2009, with the S&P 500 gaining close to 30% in 2013. Bonds had a tougher year, but a squeeze that seemed like it might become acute in May and June relented, giving bond investors time to recalibrate. And U.S. home values rose by more than 10% as well, helping restore some of the “wealth effect” that gives consumers the confidence to spend and take risks.
But somebody always bets against the trend, and this year’s notable losers include the usual mix of the arrogant, the foolish and the unlucky. Here are some of the people who've suffered major losses, monetary and otherwise, thus far in 2013:
Eike Batista. He was once a swashbuckling Brazilian billionaire with a Playboy-cover-girl wife and a Mercedes parked on display in his living room. Now he’s a pile of excuses. Batista wowed the world for several years as he rapidly built an empire of Brazilian commodity companies that pushed his wealth to $30 billion, according to Forbes. But one by one they began to crumble, with the bankruptcy of his oil company, OGX, earlier this year finally triggering the collapse of the entire portfolio. Batista insists his businesses were legit and vows he’ll make a comeback -- while claiming to still be worth $1 billion or so. Forbes estimates his wealth has plunged to $300 million. Either way, it’s one of the most astonishing comedowns of modern times.
Bill Ackman. The hedge-fund titan potentially lost nearly $500 million on his failed effort to turn around J.C. Penney (JCP). His public battle to drive down the shares of Herbalife (HLF) in order to profit from his short position has cost him possibly $500 million more. Ackman is considered a brilliant investor, but losing a cool billion and underperforming a basic index fund obviously won’t enhance his reputation.
Prem Watsa. This Indian-born Canadian investor, dubbed the “Warren Buffett of Canada,” accumulated nearly 10% of dying smartphone company BlackBerry (BBRY) by the latter part of 2012 through the firm he runs, Fairfax Financial (FRFHF). At the time, the shares had fallen more than 80% from their peak and might have looked like a good buy, if you believed in BlackBerry’s resurgence. With the phone maker's future in doubt, however, shares have fallen below $6, which could push Watsa’s losses on the firm close to $500 million. He isn't finished, though: He recently sank another $250 million into the company as part of a $1 billion round of fresh financing meant to help spearhead yet another turnaround.
Paula Deen. The down-home celebrity chef was earning more than $15 million a year from her Food Network show, endorsements, books and restaurants, until it surfaced in a lawsuit that Deen had used racial slurs on the job. The show and the endorsements are gone, while book sales have plummeted. Deen has begged forgiveness and made the obligatory tearful TV appearance. But even if fans forgive her, her celebrity moment seems to be over.
Glenn Beck. The conservative commentator and pitchman may be the world’s most prominent advocate for gold, which has tanked this year as the global economy recovered and investors piled into stocks. It's not clear if Beck himself has lost money, since he doesn't disclose his holdings, but his reputation as a "financial advisor" has certainly suffered. Gold started the year at $1,658 per ounce and is now valued at about $1,261— a bruising 24% decline. True gold bugs, however, still hope global turbulence will return in 2014, prompting a fresh rush to the one true store of value. Beck still pitches the precious metal, saying, “I believe in it strongly. I want something I can hold in my hands.”
Martha Stewart. It was another tough year for the lifestyle guru. First, the company named after her cut her pay by $500,000, from $4 million per year to $3.5 million. Then Martha Stewart Living (MSO) essentially ended its licensing deal with J.C. Penney after Macy’s filed a legal challenge. That move hit the company’s earnings harder than expected, because Penney’s withdrew a lot of advertising from Martha Stewart's magazine and TV properties. The stock has popped a bit lately amid news that Martha Stewart Living will team with eBay (EBAY) to launch a new site devoted to artisanal products, à la Etsy. But the stock is still 92% off its all-time high, with analysts predicting further losses in 2014.
Alex Rodriguez. An arbitrator will decide early next year whether to uphold a 211-game suspension imposed on the Yankees’ highest-paid player for the alleged use of performance-enhancing drugs. If the suspension sticks, A-Rod will forfeit $34 million in pay and sit out the 2014 season. The 38-year-old third baseman is still worth millions, but his endorsement deals have dwindled and a controversial end to his storied career will no doubt impair his post-baseball earning potential.
President Obama. His paycheck is secure, but Obama suffered the sharpest drop in approval of his entire presidency as his signature health-reform law, the Affordable Care Act, got off to a disastrous start this fall. Congress suffered, too, with its own record-low approval ratings in the aftermath of the government shutdown. But the momentum going into 2014 seems to be with Republicans, since Obamacare seems likely to keep generating controversy. If the new health law helps Republicans take control of the Senate — and thus the entire Congress — in next year’s midterm elections, Obama could end up one of the biggest losers in 2014 as well.
Rick Newman’s latest book is Rebounders: How Winners Pivot From Setback To Success . Follow him on Twitter: @rickjnewman .
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