It’s been widely reported that Joe Lewis’ losses in the Bear Stearns collapse amount to $1 billion. 

However, investors that hold large positions in a company are able to use derivative instruments, such as forward contracts or swaps, to hedge their risk.  It’s possible he has lost significantly less than $1 billion.

I haven’t seen any reports on whether Mr. Lewis had a hedging strategy in place.  But I have to believe that every investment bank would have tried to sell him a hedge product after he bought up a large stake in Bear Stearns over the last several months or years.  After all, that’s what investment banks do.  They find someone with money and talk them into buying a product.  It’s good honest work (as long as it’s done legally and with the client’s informed consent).

I had never heard of Joe Lewis before yesterday.  But I’m learning a little more about him.  Here are a few interesting Joe Lewis facts:

  • He had an estimated fortunate of $5.6 billion.  It’s a little smaller now.
  • He made his fortune in foreign exchange.
  • He is buddies with Tiger Woods and Sean Connery.
  • He lives in the same Bahamas resort as Sean Connery.  I understand it is the setting for some scenes from the 2006 James Bond movie “Casino Royale.” 
  • Besides his Bahamas property, he owns property in Orlando and Argentina.
  • In 1999 apparently there was an attempt on his life in Argentina.
  • He is the 369th wealthiest individual in the world according to Forbes magazine.
  • He owns all or part of several European soccer teams.
  • Apparently he avoids the spotlight.  He is well known in Britain because of his soccer teams, but he is not well known in the U.S. (until today).