Joe Lewis is often referred to as "The Boxer", both in tribute to his no-nonsense approach to making money and as a nod to the legendary heavyweight slugger of the same name. Yet in losing close to a billion dollars on Bear Stearns, he was surely "floored by a sucker-punch", says The Independent.
Convinced that pessimism surrounding Bear Stearns was overdone, Lewis began betting big last year, spending $1.2bn on a near-10% stake. He was still buying "right up to the day" of Bear Stearns' forced sale to JP Morgan Chase for a token $2 per share, says The Guardian. Even allowing for JP Morgan's improved offer this week, Lewis's punt must surely go down as "one of the most misguided gambles Wall Street has ever seen".
A third of his fortune has gone up in smoke. But one suspects the really bitter blow for Lewis, 71, is the damage done to his reputation as a speculator. There's a "pleasing circularity" to his woes, says The Times. It was Lewis, after all, who helped precipitate Black Wednesday; some claim he made even more than George Soros when sterling crashed out of the ERM in 1992 at a £3.4bn cost to the Treasury. Three years later, he made a second vast fortune betting against the Mexican peso with disastrous results for Mexico's economy.
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These coups, combined with Lewis's refusal to discuss them publicly, fuelled his mystique as the "East Ender made good", manipulating global markets with all the aplomb of a James Bond villain. His every move sparks speculation. When he quietly amassed a 7% stake in Ladbrokes in February, it was heralded as a "knockout blow to the British gambling industry".
Lewis is clearly "an obsessive and instinctive money maker", says the Daily Express. But it's his transition from "a geezer who made a mint in London restaurants" to "fully-fledged member of the world's super-rich" that's really intriguing. Born above a pub in Bow, he left school at 15 to become a waiter in his father's greasy spoon, marrying a waitress, Esther, soon after. The story goes that, to boost tourist trade, Lewis moved a concrete bus-stop to outside his cafe.
By the late 1960s he had turned the business into Tavistock Banqueting, a mini-empire of themed "medieval" restaurants, Olde Worlde London pubs and nightclubs. His big eye-opener was diversifying into tourist shops with bureau de change facilities his first taste of the easy profits to be made from currency trading. In 1979, he sold his business, ditched Esther, and decamped to the Bahamas with his second wife, Jane, to commence trading in earnest.
Life, by all accounts, has been sweet. As well as his estate in the Bahamas, Lewis an impassioned golfer who once paid £1.4m for a round with Tiger Woods at a charity auction has two golf resorts in Florida and interests in Argentina. He is not, say friends, the recluse he's made out to be, but rather has a talent for making and keeping friends including his neighbour, Sir Sean Connery. "He is very straightforward... there's no messing around," a former associate told The Guardian. And he's certainly a cool customer. "He is not a screamer, he doesn't stamp his feet or get agitated by anything." Lewis, in short, seems to possess the optimum temperament for a gambler of his magnitude, concludes the Daily Express. Time will tell if he is "as good at losing as he is at winning".
Joe Lewis: down, but not out?
"One of the rewards of success is the quiet enjoyment of it," Lewis once told The New York Times. "Being on the front page of newspapers doesn't allow that." There's not much chance of that now. Immediately after Bear Stearns' shotgun marriage to JP Morgan, he broke the habit of a lifetime by going on the record to denounce the $237m offer as "derisory". Reports soon surfaced that he'd teamed up with Bears' chairman, Jimmy Cayne, to elicit a counter-offer.
"Dream on", was the general reaction, says John Gapper in the FT. Not only was JP Morgan believed to have imposed water-tight terms, but without the backing of the Fed (which insisted that only a token price be paid in return for its pledge to back $30bn of the firm's liabilities) any deal would be off. As one analyst told The Guardian, unless Lewis is "willing to guarantee $30bn in liabilities, he'd better just fade and go away."
"Outside the confines of Wall Street, said Gapper, "everyone wanted this to remain a bitter lesson". And so it should. "The taxpayer has had to stand behind institutions that acted as gigantic slot machines" for staff and speculators like Lewis. JP Morgan chief Jamie Dimon was clearly shaken by the fury of Bear Stearns' employees, but it may have been the prospect of "a lengthy legal battle" with Lewis that made him raise the offer fivefold, says The Guardian.
Having clawed back $100m-odd, Lewis is unlikely to stop there, says Lex in the FT. "Now investors have sensed weakness they will try to push the price still higher". As one of Lewis's managing directors at his Tavistock investment house says: "it's definitely not gloom and doom. We go on and we don't miss a beat."
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