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If you haven't heard of this contract, its really amazing. It allows the holder to buy a portfolio of stocks up until the Wednesday of the following week based

If you haven't heard of this contract, its really amazing. It allows the holder to buy a portfolio of stocks up until the Wednesday of the following week based on last weeks prices. So essentially you can invest with perfect hindsight. The counter party, Aviva, didn't write the original contact but acquired the company that did. They haven't paid out any money yet and have contested the contract many times in court, loosing each time. It's gotten worse for Aviva as their original plan was to delay paying out to bleed him dry to make him settle, but a few Swiss banks have lent him money to live off of and lent even more so he can leaver up his bet as he's allowed to invest additional funds into this contract. The biggest issue is that you really can't value the contract as the holder is 25 and it pays out until his death. If he lives until he's 75 its worth more than the company could reasonably find. If you are wondering why the insurance company would write such a contract, it was originally designed to be like a savings vehicle back in the 80s. It would let you swap between bonds and equities as your risk profile changed over the course of your life. Back in the 80's it wasn't really considered feasible to sort through all the markets and figure out in time what to invest in to make this arbitrage. But with the internet, things changed....

pmiller2 10y ago
> If he lives until he's 75 its worth more than the company could reasonably find. I would say that he's got a pretty strong incentive to make sure Aviva doesn't go out of business. That alone will limit his ability to extract value out of this contract.
- tokensimian 10y ago
  As would the people who lent him money...
- Bromskloss 10y ago
  And Aviva has an incentive to make him "go out of business". :-|
  - pmiller2 10y ago
    He only has to stay afloat long enough to be able to buy the company. ;)
morgante 10y ago
> If you are wondering why the insurance company would write such a contract, it was originally designed to be like a savings vehicle back in the 80s. I've heard this defense before, but it's not really very good. Even in the 80s this would have been a ridiculously stupid contract. Letting people invest with hindsight is fundamentally flawed, even if you think it would be "difficult" to get information then. It's not like this contract depends on realtime changes. You could easily have exploited it just as well with a daily call to your broker. The person who wrote this was a colossal idiot.

pmiller2 10y ago

> If he lives until he's 75 its worth more than the company could reasonably find. I would say that he's got a pretty strong incentive to make sure Aviva doesn't go out of business. That alone will limit his ability to extract value out of this contract.

tokensimian 10y ago
As would the people who lent him money...
Bromskloss 10y ago
And Aviva has an incentive to make him "go out of business". :-|
- pmiller2 10y ago
  He only has to stay afloat long enough to be able to buy the company. ;)

morgante 10y ago

> If you are wondering why the insurance company would write such a contract, it was originally designed to be like a savings vehicle back in the 80s. I've heard this defense before, but it's not really very good. Even in the 80s this would have been a ridiculously stupid contract. Letting people invest with hindsight is fundamentally flawed, even if you think it would be "difficult" to get information then. It's not like this contract depends on realtime changes. You could easily have exploited it just as well with a daily call to your broker. The person who wrote this was a colossal idiot.