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Have You Ever Wondered How . . .

. . . individuals can fund — or partially fund — America’s Cup campaigns that cost $150 million, and still have enough left to own 450-ft giga motoryachts?

The answer turns out to be ‘very easily’ if you’re in the league of Larry Ellison, the man behind Oracle, the BMW Oracle America’s Cup teams, and the 450-ft Rising Sun.

Using the two guards on the aft starboard side for perspective gives you an idea of how big Rising Sun really is.

©2007 Latitude 38 Media, LLC

With Oracle having just turned in another blockbuster quarterly report — $1.2 billion profit — we decided we’d nose around the public records of insider transactions, to see what kind of compensation the officers — namely Mr. Ellison — were getting. It was a mind-blower:

December 19 — $6,880,000

December 19 — $20,940,000

December 18 — $6,880,000

December 18 — $21,010,000

December 17 — $6,880,000

December 17 — $20,970,000

December 14 — $6,880,000

December 14 — $21,280,000

December 13 — $6,880,000

Well, it went on and on and on like that until our printer ran out of paper. So it seems as though Ellison, if he wanted to, could pick up the tab for an entire multi-year America’s Cup campaign with a week’s stock options, and Coutts’ $15 million yearly salary in less than a day. Yep, that’s what you can do if you own 1.2 billion shares of a company that trades at $22+, having just gotten a 6.5% bounce from the good earnings report.

Some people hate all the super rich. Not us. We think you have to admire Ellison, a former Islander 36 owner, for two reasons. First, he makes all his money by saving other companies even more money, not by hoarding a scarce resource such as oil or copper. Second, he’s as rich as he is because when starting Oracle, he had the skill and courage to resist all the venture capitalists who tried to throw millions at him. As a result of being willing to postpone immediate financial gratification, he managed to keep nearly 20% of his company’s stock, which allowed him to become phenomenally rich over the longer run. Always thinking ‘long’ is a good lesson for everyone, both in personal finances as well as sailing.

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