Steve Hanke’s Patek Philippe watch and his Iowa farmland regret

Hanke, 83, began trading soybeans at 14 and has since worked in currency and commodity markets. A longtime professor of applied economics at Johns Hopkins University, he was president of Toronto Trust Argentina when it became the world’s best-performing emerging-market mutual fund in 1995.

Hanke told Business Insider he bought the watch because it was beautiful and cost little more than the gold in its case. He later learned it had been custom-made for its original owner. Similar watches are listed online for prices suggesting his could fetch over $100,000 at auction—more than 1,100 times his purchase price. He wears it on special occasions and says admiring it daily is a non-financial return.

Other successes included betting against oil in 1985 after modeling a breakdown in OPEC production discipline, which he expected to push crude below $10 a barrel. Hanke said he was heavily leveraged and short when the prediction came true. At Toronto Trust Argentina, he and his team also bought Argentine bonds during the 1994 “Tequila Crisis,” as others sold. The fund outperformed its emerging-market peers the following year, he said.

Hanke said stop-loss orders helped keep his trading losses from becoming catastrophic or notable. His biggest regret was not buying Iowa farmland when the average price fell below $2,100 an acre in 2002. It has since climbed more than fivefold to over $11,500 an acre, he said. Hanke put its annual inflation-adjusted return at 5.2% and called the missed purchase perhaps his only investment regret.