Katy Perry’s Lilac Bentley: Just One of the Celebrity Valentine’s Day Gifts that Would Have Been Better Off in a Bank Account

Posted in Investments • February 14, 2013

investing in companies

It might not be as romantic, but what if the celebrities who spent thousands of dollars on expensive gifts for Valentine’s Day skipped the presents and invested that money in the companies instead? For celebs like Tom Cruise and Katy Perry, the investment opportunities among the luxury brands that produced their V-Day gifts were worth much more than the actual items purchased.

Below, we’ll look at some mega-expensive gifts celebrities have given or received for Valentine’s Day, then examine how much money they’d have if, rather than giving the gift, they invested that money in the stock of the company that makes the gift.

Celebrity Couples’ Expensive Gifts for Valentine’s Day

valentines day1. David & Victoria Beckham — $8 million necklace

Surely, Becks scored a win when he purchased his wife a $8 million Bvlgari necklace for Valentine’s Day last year. We’ll see in the next section how much sparkle that $8 million would be adding to his portfolio had he foregone the baubles and invested his cash.

(Photo: www.india-server.com)

expensive gifts2. Tom Cruise & Katie Holmes — $20 million jet

The Top Gun star reportedly bought his then-fiancée her own $20 million custom Gulfstream jet as a present in 2005.

The couple has since crashed and burned, so perhaps Tom wishes he had skipped the gift and invested the money? We’ll see in the next section how much Tom’s cool $20 million would be worth had he invested it.

(Photo: Celebritynetworth.com)

investment opportunities3. Katy Perry & Russell Brand — $340,000 fancy set of wheels

The “I Kissed a Girl” singer reportedly kissed goodbye to at least $340,000 when she bought then-fiancée comic actor Russell Brand a lilac-colored (lilac?!) Bentley Brooklands for a Valentine’s Day gift in 2010.

I’d imagine the Bentley is still running smoothly, even if this couple isn’t. Perhaps Katy should have invested her money instead?

(Photo: MTV.com)

celebrity valentines day gifts4. Jerry O’Connell & Rebecca Romijn — $52,000 home vineyard

In the most creative out of the bunch (pun intended!), O’Connell put in a vineyard at the couple’s house as a Valentine’s present about five or six years ago.

I’d imagine this gift-that-keeps-giving is one that O’Connell’s glad he gave, but how much money would be have if he skipped the vineyard and invested his $52K?

(Photo: NYPost.com)

Investing in Companies that Make the Gifts (or Similar Ones)

To keep things comparable, we’ll look at both 1-year and 5-year returns (using Feb. 8 purchase dates for stocks, since results are calculated to Feb. 8). One exception: We’ll look at a 7-year return for Cruise’s jet gift. Though he reportedly ordered it or gave it at the end of 2005, we’ll use the closest V-Day (2006).

1. David & Victoria Beckham — $8 million Bvgari necklace

Bvlgari is an Italian company that is best known for its jewelry, though it also produces and sells other luxury items such as watches, fragrances and accessories. The company was bought by the French firm LVMH Moet Hennessy Louis Vuitton (MC.PA) in 2011.

LVMH does not trade on a U.S. stock exchange (it trades on the Paris exchange) so we’ll  look at two similar companies — Tiffany & Co. (TIF) and Harry Winston Diamond Corp. (HWD) — that do trade on a major U.S. stock exchange.

Tiffany designs, manufactures and retails fine jewelry worldwide. The iconic company known for its blue boxes was founded in 1837 and is based in NYC.

Harry Winston Diamond is a bit different; rather than being just a retailer, it also engages in diamond mining. Like many mining companies, this company is based in Canada (Toronto). The stocks of mining companies are typically more volatile than most stocks, as you’ll see below.

$8 million invested in Tiffany (TIF):

  • 1 year ago:  $8 million (unchanged)
  • 5 years ago:  $13.94 million (+74.3% or $5,944,000)

$8 million invested in Harry Winston (HWD):

  • 1 year ago:  $9.71 million (+21.4% or $1,712,000)
  • 5 years ago: $4.64 million (loss of 39.5% or – $3,160,000) — OUCH!

2. Tom Cruise & Katie Holmes — $20 million Gulfstream jet

The manufacturer of the jet, Gulfstream Aerospace Corp., is a subsidiary of General Dynamics Corp. (GD). General Dynamics, founded in 1899 and based in Virginia, is an aerospace and defense company.

Tom would have made almost $7 million had he opted for traditional flowers and chocolates and invested his $20 million in General Dynamic stock:

$20 million invested in General Dynamics (GD):

  • 7 years ago:  $26.86 million (+34.3% or $6,860,000)

3. Katy Perry & Russell Brand — $340,000 Bentley

In what may surprise some folks, the German car company Volkswagen AG (VLKAY) owns the luxury Bentley brand. The British automaker isn’t the only luxury automaker VW owns: It also owns Lamborghini and — higher-end, if not luxury — Audi.

$340,000 invested in Volkswagen (VLKAY):

  • 1 year ago:  $463,760 (+36.4% or $123,760)
  • 5 years ago:  $389,640 (+14.6% or $49,640)

4. Jerry O’Connell & Rebecca Romijn — $52,000 home vineyard

This one is different than the others in that there’s not a company that produces vineyards. So, we’ll look at two alcoholic beverage makers, both of which trade on the New York Stock Exchange (NYSE), that produce wines: Constellation Brands (STZ) and Diageo Plc. (DEO).

Constellation Brands produces and markets alcoholic beverages (wines, spirits, beer) in the U.S. and internationally. Its wine labels include Robert Mondavi, Clos du Bois, Blackstone, Estancia, Arbor Mist, Toasted Head, Simi, Black Box, Ravenswood, Rex Goliath, Kim Crawford, Franciscan Estate, Wild Horse, Ruffino, Nobilo, Mount Veeder, Inniskillin and Jackson-Triggs brands. The company was founded in 1945 and is based in New York State.

London-based Diageo, founded in 1886, also produces and markets spirits, beer and wine. Its beverage portfolio is heavily slanted toward spirits and beer, rather than wine. Some of its better know brands include Johnnie Walker Scotch whiskey, Seagram’s 7 Crown whiskey, Smirnoff vodka, Baileys Irish Cream liqueur and Guinness stout.

$52,000 invested in Constellation Brands (STZ):

  • 1 year ago:  $76,544 (+47.2% or $24,544)
  • 5 years ago:  $81,848 (+57.4% or $39,848)

$52,000 invested in Diageo (DEO):

  • 1 year ago:  $68,640 (+32% or $16,640)
  • 5 years ago:  $92,248 (+77.4% or $40,248)

In all but one scenario above (5-year return on Harry Winston Diamond), each celebrity would be better off – in terms of strictly money — had he/she foregone the pricey Valentine’s Day gift and invested the cash in the company that makes the expensive gift (or a similar one).

Ah, but money can’t buy you love, right? Just ask Tom Cruise and Katy Perry.

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