Why John Arnold Is Disliked for Giving Away Billions

By Shlomo Maital

John Arnold

John & Laura Arnold

   If you’re a billionaire, and are busy giving away your money for good causes, you should be widely known and beloved, right?   Well, John Arnold (and wife Laura, a lawyer) are billionaires, have a foundation that is giving away their money for good causes – and they are widely disliked. Why?

   Arnold made a fortune as a financial trader. His method:   Discover an idea, a truth, nobody else saw. Then bet everything you had on it.   In 2006 Arnold’s hedge fund Centaurus bet against natural gas prices. He was right. They fell. He made a fortune. In 2008 Arnold bet on a commodities price crash. He was right. Commodities fell. Three years ago, at age 38, and worth $4 billion, Arnold decided to spend the rest of his professional life giving away his fortune. The story is told by Bloomberg Business.

   Arnold and wife Laura decided to focus on problems “dragging down the nation that no one else wants to confront”. For instance: research integrity; drug-sentencing reform; organ donations; pension systems that are broken.  

   “I try to look at supply and demand,” Arnold explains. “Where is the need being met today, and where is there unmet demand?”.   Arnold, a moderate Democrat, believes a rich country like the U.S. should provide a high safety net for its citizens. At the moment, it does not.

   Why is Arnold unpopular? Mainly for his work on pension reform. Fixing the pension system means slashing payments to people who need and were promised them. Without the changes, the Arnolds say, both governments and pensioners have no future.

   Arnold was used to being unpopular as a financial trader. He accepts the criticism of him as philanthropist. His method? Find “leverage points in the system”, and create “higher potential for value added”.

   Want to help people? Give away money?  It may well bring sharp criticism, when only love and praise are expected. Be prepared for it. You can be punished for doing good, if you rile vested interests. In fact, the more good you do, the angrier some people will become.

   Source: Dan Murtaugh, Bloomberg News, Nov. 19, 2015