American billionaires have gotten $280B richer since the start of the pandemic

https://www.fastcompany.com/90494347/american-billionaires-have-gotten-280-billion-richer-since-the-start-of-the-covid-19-pandemic

by spking • 6 years ago

72 35 6 years ago

fastcompany.com

pstuart2• 6 years ago

Ye olde crash things, use spare cash buy them on the cheap from those in distress, lather rinse and repeat game.

maxharris7• 6 years ago

What evidence is there that "the rich" created the coronavirus pandemic? Or am I simply misunderstanding your comment?

jmeister• 6 years ago

Yeah, I expect to see this evil rich conspiracy theorizing on reddit or Twitter not HN

pstuart2• 6 years ago

I didn't mean to imply that "the rich" created this pandemic, but the part about being able to buy up assets on the crash and be the only ones to prosper from it.

AbrahamParangi• 6 years ago

The rich are richer partly because many are in tech which is doing okay, but mostly because the government is pumping the asset markets with trillions of dollars in cash injections.

maxharris7• 6 years ago

I was ticked off by that, because I would have made much bigger gains had stocks been allowed to fall to their true bottoms. Instead I was forced to buy in (with my entire life savings) or risk losing out.

And yeah, I could have put less in, but I've been sitting on the sidelines, waiting for a crash for years!

mikestew• 6 years ago

Instead I was forced to buy in (with my entire life savings) or risk losing out.

Can you describe the person holding the gun to your head? I suspect there's a misalignment of perspective, exaggeration, or perhaps some missing knowledge of investment, or details are left out. But no one was forcing those with large wads of cash to go buy VOO.

...but I've been sitting on the sidelines, waiting for a crash for years!

Timing the market, the classic n00b mistake. It worked out for you...this time.

breitling• 6 years ago

This being an election year likely had something to do with that decision

OGWhales• 6 years ago

You didn’t know it was rigged?

ramblerman• 6 years ago

Your strategy has a few pretty big assumptions:

a) You can time the market, and specifically when it's at the bottom.

b) Corona virus is now properly calculated into the market, and it's happy days from here

emmp• 6 years ago

I wish discussions of networth at these scales were more nuanced. If the stock of your company goes up 50% or whatever, but you can't exactly sell more than x% without tanking it or losing control of the company, it's just so much more complex than you're 50% richer.

This is not to discount that they're filthy rich, and certainly enough of it is liquid for them to buy in essence anything they want. So much discussion about billionaires in the press seems to discuss stock fluctuations as if they were cash injections directly into a bank account, which can't hold at those scales.

How much could Bezos actually liquidate tomorrow without losing control or tanking Amazon? That would be an interesting number. I don't have a clue

jjeaff• 6 years ago

How much could Bezos actually liquidate tomorrow without losing control or tanking Amazon?

Unless he had a very believable reason to need the money that is fully isolated from Amazon the company (which is near impossible for a cult ceo/founder), Bezos selling any significant amount of stock right now would likely cause a heavy crash. The market is going to be particularly sensitive right now to the fact that someone like Bezos would only be selling if they know something big that we don't know.

The same applies all the time, but particularly in uncertain, volatile time.

notechback3• 6 years ago

Of course he'd be stupid to sell all in one go and there's no reason why he'd sell big chunks at once. But of course he can (and probably is) constantly sell small amounts and take cash out.

kennywinker3• 6 years ago

I don't think it matters? Like if bezos wants cash he doesn't have to sell stock he can just borrow against his holdings. I don't know a lot about how the ultra-rich operate, but I have been lead to believe that this is the standard practice.

valuearb4• 6 years ago

Borrowing a significant amount against public company stock is extremely risky.

maxharris7• 6 years ago

I'm 39. I lost my job last September, when the startup I had worked for the last four years had folded.

I don't have a 401(k), and I only had $110k saved. For my entire life, I have I kept my money out of the stock market. I only dabbled a little - only $600 of my savings came from a few shares of AMZN that I bought and sold back in 2017. The rest was from paychecks.

I started to wise up last year, when I read that the yield curve had inverted. I didn't have a clue as to what event would trigger a drop in stocks, but I knew something was coming. So my plan for months has been to buy when most people were panicking, and then to basically just sit on the stocks until cooler heads prevail.

Over a two week period starting on March 16th, I put every cent of my savings into the market. I learned on my feet, dumping the ETF shares I bought (VOO) for only an $89 loss, going directly against diversification, in favor of buying things I think I understand.

And you know what? I'm up 40 grand, and I really believe in the stocks I picked. As the other automakers drive off a cliff, TSLA is positioned perfectly (batteries, autonomy, lower TCO). And AAPL makes great products instead of depending on advertising. (I have other positions, including a bet on Chinese eVTOL maker eHang, but I'll keep this brief.)

What I'm doing is pretty damn risky in the short-term. I could still lose all my gains and much of my principal. And I only have $10k in cash to live off of if I can't find a job.

Hatred of the billionaires - whose companies invent and produce the things that drive our living standards up - also hurts conscientious people like me. Instead of envying the rich, focus on how to get rich yourself.

NB: Gains from stocks are not free money! What I'm doing feels like a full-time job, as I continually worry about losing everything. This involves an incredible amount of research and planning, the ability to take on an incredible amount of risk, and that's stuff that the envious haters never see.

workingname• 6 years ago

Putting in a bunch of money in the stock market to get rich, why hasn't anyone thought of this before?

sauwan• 6 years ago

No offense, but the difference between someone being able to invest cash in a down market and the structural imbalances that allow the billionaire class to flourish (in any market) are markedly different things.

We can both applaud people like you taking a risk AND still recognize that regulatory capture and market power concentration are stifling innovation and concentrating wealth in ways that we haven't seen in nearly a century.

whytaka• 6 years ago

Perhaps you've held these views regarding the merit of billionaires long before your foray into the market, but the way you write your story makes it seem like you've done a complete 180 all of a sudden because now you are also getting rich off of the market, and now everyone else is an envious hater. It sounds incredibly naive and immature.

I've been quite lucky with the market myself and it's clear to me that the game is very much rigged. Not only that, but the people who come into the market for 30%+ gains on a quarterly basis are the people promoting a business environment that incentivizes short term gains at the expense of real economic development.

Congratulations on your gains.

maxharris7• 6 years ago

you are quite incorrect in thinking that I've done a complete 180.

https://twitter.com/maxharris9/status/946098382501593093 https://twitter.com/maxharris9/status/946092172301934597 https://twitter.com/maxharris9/status/946086949034401792 https://twitter.com/maxharris9/status/1193024005390778370 https://news.ycombinator.com/item?id=5956471

Congrats on your gains as well! And I don't think it's fair to either of us to call it luck.

kennywinker3• 6 years ago

None of what you are describing requires the existence of billionaires. The companies, the stock market, the inventions, they would all exist even in a world where jeff bezos' net worth is only $500mil instead of $107.8bil

maxharris7• 6 years ago

The alternative is to beg a risk-averse committee (public ones are much worse than private ones in this respect, but they are similar in this context) to invest in big bets.

When Elon Musk went to Russia to try to buy a rocket in 2001, they thought he was full of shit. So he went to work on building his own.

https://economictimes.indiatimes.com/news/science/how-tesla-...

Tesla had to vertically integrate its supply chain to build the Model S because none of the existing suppliers would take him seriously.

To the extent that they have earned their success and steered clear of regulatory capture and the like, billionaires don't need moral justification for existing. Having said that, those billions are used to fund big bets that would otherwise not happen. I am glad they exist!

notechback3• 6 years ago

You make some cash but you're not a billionaire. There is a structural difference where some gain money even when everyone else is losing (not after everyone else has lost like in your case!).

There's no issue with some people being richer than others, but having some with hundreds of billions in the bank (constantly growing) while the companies they own fire people and pay poverty wages to those that they do employ is pretty insane. We're not in the middle ages where a lord treats their serfs as they like and if some starve that's fine.

There is a process where the rich constantly scratch the profits off the economy. When it goes well they profit. When it goes badly they profit and ask the government (aka tax payers, aka middle and lower class and small companies that don't register in the Bahamas to avoid taxes) to bail out the struggling companies out of which they have drawn billions in the previous years.

It is absurd and obscene.

andarleen• 6 years ago

And now they are conspiring to make people believe the virus is not as bad as it is, so workers can get back to slaving away, while the government pushes people into their hands by providing no assistance whatsoever.

valuearb4• 6 years ago

There are no conspiracies or conspirators.

cwhiz• 6 years ago

The stock market is a government backed ponzi scheme. It only works if new investors keep buying and the government won’t let it fail.

theologic• 6 years ago

I am not going to defend the wealth of the ultra rich, however, I do think that it is important to call out that the headline is wrong. The increase in wealth of $280B is based on a time period of March 18 to April 10. On March 18th, the market was close to its lows. The SP500 recovered approximately 4.5% from it's lows, thus making the rich $280B richer. If you had stock at this time, as a percentage, you would have seen a similar recovery.

If we wanted to measure impacts on the wealthy, we should measured from February 1st, which was closer to the market high and the beginning of the crisis in terms of knowing the world had an issue. In this case, the billionaire class would have lost roughly $3T dollars from Feb 1 to April 10th, if my rough estimates are correct.

Of everybody, Bezos has been doing very well during this down turn because the bulk of his wealth, Amazon, is custom made for a SIP environment. From February 1st, his fortunes are only down 10%. However, as a class, the billionaires have seen a clear impact to their fortunes during this crisis well beyond Bezos smaller hit.

Actually, and I don't work for Amazon, I think Bezos has done a remarkable job in creating value. Yes he has a ton of money, but he took extreme measures of risk and made incredibly smart decisions. His balance sheet is very strong, and he doesn't need a bailout to emerge very strong.

However, there is a very large class of billionaires that have made bad decisions, ran up debt, and now get the federal government to bail them out. These are the people that I believe deserve to face the moral hazard of creating companies out of other peoples money. Bankruptcy sound horrible, but in reality, if done smartly, it means that the company's assets are sold to a bidder, and the slate is wiped clean. The people that suffer are those that created the massive debt in the first place, and those that financed this massive debt or bought into the system. I am not saying there won't be people that are hurt if we allow some bankruptcies. I do question the "no large corporation should go under." If we had a good computer sim on this, I believe allowing poorly run companies with over leveraged balance sheets to go under would ultimately result in a better business environment.

American billionaires have gotten $280B richer since the start of the pandemic

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