Carl Berg, a Silicon Valley real estate mogul and venture capitalist, recently sat down for an interview for the February issue of Bloomberg Markets magazine. Here are some excerpts:
Q: What was your best investment?
A: Sun Microsystems. Scott McNealy, the founder, was a manager at one of my venture investments and wanted me to be the first investor. In 1982, for $1 million, I got 25 percent of Sun at 25 cents a share.
Q: You also made a fortune on tech real estate. How?
A: For decades, if you did anything in a decent location, the question was, Will you lease your building today or next week? A market like that just doesn’t exist many places.
Q: You’ve sold most of your portfolio. Why?
A: I built mostly one- and two-story structures. High-rises get very expensive very quickly. I wasn’t comfortable with that market and saw things going that way.
Q: What have you retained?
A: The Silicon Valley campuses of Apple and Microsoft. The combined square footage is about 1.1 million.
Q: You own a possible van Gogh?
A: It’s either a van Gogh or a van Goo. I bought it at auction in 1997 for $315, 000. Half the art world said it was an absolute fraud; half said it’s probably something. There’s still a chance it’s real.
Q: So what’s the safer play: Treasuries or a Picasso?
A: If it’s a real Picasso, that could be very safe. The art market has gone up, consistently and dramatically.
Q: More multiple choice: gold, bonds or hedge funds?
A: Gold. Right now, I think we’re very close to the bottom, so it’s got a relatively small downside and an awful big upside.
Q: What’s been your worst investment?
A: The battery company Valence Technology. I’ve been in it 22 years, and we’ve never made a profit. It drives me crazy. My goal in life is to make that damn company profitable.
Q: Do you miss owning San Jose’s soccer team?
A: It was a lot of fun, but I lost an incredible amount of money. I’ll never touch a sports team again. You’ve got to be insane.
Q: Any other lessons from your playbook?
A: Common sense is more important than anything else. And I’m not afraid to ask a question that’s a stupid question.