Hedge Fund Manager Chose McDonald's Over Google. One Is Worth 16x More Than the Other.

Writing for The Motley Fool just weeks before Google's IPO, Tilson — a respected value investor — declared that McDonald's was the smarter bet because of Google's "absurd" valuation. He gave 90% odds that Google's margins and growth would be "materially lower" within five years. He specifically invited people to hold him accountable for this prediction.

So how'd that work out? Google went public at $85 per share in August 2004. Today, adjusted for stock splits, that same share would be worth over $5,500 — a 6,400% return. Alphabet (Google's parent company) is now worth $3.8 trillion. McDonald's? About $233 billion. That's not a typo — Google is worth more than 16 times McDonald's.

To be fair, Tilson later acknowledged his mistake. But somewhere in an alternate universe, there's a Whitney Tilson who bought Google at $85 and is doing just fine.