Sunday, October 12, 2008

Founder of Maxim Magazine: "I Have Huge Quantities of Small Bits of Gold.”

FT interviews Felix Dennis:

...his recent book on business, How to Get Rich, Dennis estimates his wealth at somewhere between $400m and $ of his US business partners, Peter Godfrey, warned him more than two years ago that the end of the financial world was approaching fast. “He said to me, ‘I want you to do me a favour. I want you to hand Maxim over to me, even though I’m only a 12.5 per cent shareholder. I’m going to sell it; this is my last big deal. You mustn’t interfere. You mustn’t even come to America,’” guffaws Dennis , who laughs a lot...

He agreed to let Godfrey sell the US magazines (Dennis still owns Maxim in the UK) and promised to stay away for six months. “A year and a quarter later, I still hadn’t been to America because he hadn’t done the deal. I spent five months just sitting in Mustique.” Eventually, last year, Godfrey sold Maxim and some other titles to a private equity group for a headline $240m. “When we got the deal done he just said, ‘Felix, this is the endgame. This is when you have to decide if you want to be the guy that ends up with the most toys or you want to be the guy that ends up with some security. Sell everything. Everything.’”

Although Dennis couldn’t bring himself to sell his British businesses, he says he did take Godfrey’s advice and sold his investments “with a bit of a heavy heart”. But what to do with the proceeds? “I put £10m in Treasuries, which are virtually untouchable, but the rate was so appalling I thought, ‘I’ve got to do something.’ And so I was advised by dear old HSBC Private Bank to take an AIG bond. ‘They have a trillion-dollar balance sheet – if AIG falls that is the end of the western world.’” So Dennis popped another £10m into AIG’s coffers and looked forward to a decent return. “The buggers immediately nosedived,” he laughs.

This wasn’t the only piece of advice he took. Godfrey, he says, told him: “Buy gold. Physical bits, small bits, so when you need to get a sandwich you can take it down the shop and take 300 sandwiches away.” Dennis is by now shaking with laughter. “And God help me, in a vault here in London, I have huge quantities of small bits of gold.”

Dennis on wine:
He tells the sommelier: “I would like a fruity white wine and then I want to wreck it because I’m going to pour some water in it.” The sommelier is unfazed. “He’s seen me wreck them before. This is the trouble with living with a French woman. You learn appalling habits. The English treat wine with great reverence. Because the French grew up with it, they have no reverence for it whatsoever. They’d feed it to the dog if they thought the dog would enjoy it.”

Dennis on dying:
...around eight years ago, he fell seriously ill, an episode he recalls in typically blasé fashion. “The odd discovery there is that although I was desperately ill and supposed to be dying, I was still bored stiff.” That laugh again. “You can actually be bored stiff while you’re dying.”

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