Silver Thursday and the fall of the Bunker Hunt, the world's richest man

Nelson Bunker Hunt had a long way to fall. At the end of the 1960s, he was popularly known as the world's richest man. He had built up the fortune inherited from his father, the legendary oilman H L Hunt, to somewhere between $8bn and $16bn, including oil fields in the Yemen, cattle ranches in Australia, antiques, pizza parlours and the Bronco Bowl, a bowling alley in Dallas.

A decade later, it also included about a third of the world's silver.

Hunt "sometimes came off as a fat, squinty-eyed bumbler", according to his biographer, Harry Hurt III. But he was not to be underestimated: "He also had extraordinary bursts of creative vision." It must have been during one of these, in 1970, that Hunt and his brothers Herbert and Lamar decided to buy silver at $1.50 an ounce. Because a decade later, in 1980, the price had soared to $50 an ounce.

The Hunt brothers’ losses exceeded $2bn – around $5bn in today’s money

Driven by Bunker's fanatical belief that a coming apocalypse would spell the end for paper money, the 'Hunch brothers', as they were known in Texas, accumulated around $4.5bn worth of glittering silver, piled up in Swiss bank vaults.

But they never counted on federal commodities regulators intervening. Anxious about the size of the Hunt brothers' holdings, they acted to change the rules on trading limits. "They were gunning for us pretty hard", Hunt reflected, when the Dallas Morning News caught up with him earlier this month. Suddenly, everyone was panic selling, and on March 27, 1980 - 29 years ago this week - silver bombed to under $11 an ounce.

Hunt, whose greed as a speculator makes many of today's burned bankers and traders look conservative by comparison, had his comeuppance. "We were forced to sell, and we did," he said. The three brothers' losses exceeded $2bn - approximately $5bn in today's money.

The day became known as Silver Thursday, and Hunt was left unable to pay the futures contracts he'd gambled on. Ultimately, the man once known as the world's richest, had to file for bankruptcy, was found guilty of fraud by a civil court, banned from commodities trading and widely vilified.

So extensive were Hunt’s holdings that it took fully seven years to liquidate them

As Caroline Hunt, his wife of 57 years, said, "I think everybody was looking for a whipping boy, and unfortunately Bunker was it."

So extensive were Hunt's holdings that it took fully seven years to liquidate them. The wind-down of Lehman Brothers, by comparison, is only expected to take two. But having been stung before, when Colonel Gaddafi suddenly nationalised Hunt's Libyan oil holdings in 1973, Hunt knew about losing money, and was able to take it philosophically.

It helped that neither Bunker nor Caroline had particularly expensive tastes - "We didn't have to give up any yachts, because we didn't have any," said Caroline - and it helped even more that a $200 million trust fund from his father could not be touched by the bankruptcy order.

As a result, Hunt, now 83, still breeds racehorses, and dabbles in oil exploration in Africa and the Middle East. He says he has no regrets, and has this advice for today's budding entrepreneurs: "The oil business is good if you can find the oil," and: "If a person is going to have racehorses, I would advise him to get good ones."
'Texas Rich' by Harry Hurt III, Replica Books  ·