If I would ask you to name wealthiest people in the world, who would come to your mind
first? Elon Musk?
Jeff Bezos? Or how about Mark Zuckerb urg with a net worth
57 billion dollars. He is not having his best days lately since facebook stock plumetted
so dramatically. Regardless, it’s easy to calculate these peoples net worth, all you
have to do is take a look at what percentage of the companies they have fouded they own
and what is the capitalization of that company. The only problem with that wealth is that
its only on paper and you can’t instantly turn I t into hard cash. Theoreitically its
possible but in reality its way more difficult than you imagine because when inverstors realize
that the founder is massively selling off, that would push investors to lose confidence
in the company. The world is filled with millioniares and
billioniares but they don’t often display their wealth to the public. Take Peter Thiel
for example. He is known to be a billioniare. At the end of the day, he has built Paypal,
was the first angel investor in Facebook and helped the company to go public and become
an icon of Silicon Valley. However, forbes estimates his net worth at around 2 to 3 billion
dollars until it was leaked that he has used roth IRA to turn 2K dollars into 5 billion
dollars tax free cash. On the top of his known net worth, it seems like he has been hiding
another 5 billion dollars. And that’s a small example, At least $11.3
trillion is held “offshore,” according to a 2020 study. That’s why the end goal
of any tech billioniare is to sell their shares and turn them into cash like Bill gates did
back before the dot com bubble crashed or Travis Kalanick when existing Uber. The challenge
is to sell before everything crashes, when prices are at their peak and not too early
to maximise your profits and that’s exactly what billioniares have been doing lately.
Everyone from Bill Gates to Elon Musk to Zuckerburg have been masively selling their stocks in
the last few month. So that raises a few questions. Why are these billioniares selling their shares
now? Are we on a brink of another crash? And if that’s the case, how bad will the crash
be? We will answer all of these questions and
many more, but before we do that, give this vodeo a thumbs up and lets dive in.
Unlike other tech billioniares, Bill Gates’s wealth isn’t just on paper, he can turn
his 123 billion dollar fortune into cash much faster than other billioniares like Jeff bezos
or Elon Musk or Mark Zuckerburg. Most people think that Gates’s net worth comes from
Microsoft which is not true. Yes, he made his fortune through microsoft but he quickly
diversified his portflio. Microsoft today makes up around 1 percent
of his entire portflio. One of his biggest and best position is in Berkshire Hathaway.
He owns at least 54 million shares of the company, which amount to around 11.2 billion
dollars. Berkshire Hathaway is a holding company that invests in multiple different companies
such as Apple, Bank of America, IBM, General Motors, Goldman Sachs, and owns entire other
companies like Geico or Duracell. Gates also own 18.6 million shares of Waste Management,
Inc, which amounts to around 2 billion dollars. But recent reports show that Bill Gates sold
about $940 million of Canadian National Railway Co. shares, trimming one of the largest holdings
of the investment firm that controls his $117 billion personal fortune. He also sold his
entire stake in Grupo Televisa, a Mexican multimedia mass media company. Alphabet is
another stock that the billioniare got rid entirely in the first quarter of 2022. The
analyst noted that the firm’s Search and Cloud business saw healthy growth, but YouTube
advertising revenue missed consensus estimates for three consecutive quarters with headwinds
looking set to continue into the next quarter. During the pandemic, the stock price doubled
reaching its 2978 dollars per share in November 2021, so it seems like Gates sold his shares
at the right time since the stock is down by over 20 percent since then.
Another company that he has sold off his entire stock is Canadian Pacific Railway Limited.
Right before Microsoft went public, Gates owned around 49 percent of the company. If
he didnt sell his stocks back then, his networth would be today around 1 trillion dollars or
1.5 trillion dollars when Microsoft valuation rose to 3 trillion dollars at the peak of
the pandemic. But he chose to sell his microsoft shares to invest in more stable assets such
as land, railways and real estate. Who could have predicted that Microsoft will be so successful.
He is not alone who has been selling off their stocks lately. The pandemic was one of the
greatest periods for tech stocks ever and Bil gates predicted the pandemic 5 years before
it happenend where he mentioned in an interview with Vox that a global pandemic is the greatest
danger the humanity is facing. So he has definitely predicted how governments will most likley
react in such circumtances and prepred himself to get the best advantage out of the pandemic.
According to WhaleWisdom.com, first-quarter Form 13F filings showed that investors sold
almost three times as many shares as they bough. Mark Zuckerburg, sold Meta Platforms
Inc. stock almost every weekday during the entire year of 2021.
In 2021, Page has sold around $1.8 billion in stock of Google parent Alphabet Inc. and
Brin around $1.7 billion. It was the first time either had sold shares since 2017. Jeff
Bezos, the world's second-richest person, has sold more than $9 billion in Amazon stock.
Elon Musk, words richest person sold around 12.7 billion dollars worth of tesla shares.
He even twitted a poll whather he should diverisify his porftlio or not. America's billionaires
have sold $42.9 billion in stock this year, more than doubling their $20.2 billion total
in 2020, according to the Bloomberg Billionaires Index. That’s much more than 6.6 billion
dollars they have sold in 2019 or 7.2 Billions in 2018. Timing the market is of course almost
impossible because the number of factors that influences the market are sometimes difficult
to track. Who could have known that the moment the pandemic
reached the US, the sp500 would drop by over 30 percent?
But the last 2 years have been so unique that tech billioniares couldn’t just keep watching
their stocks rise so much without cashing out. The only problem was that, no one knew
for sure to what extend the fed is going to go before it raises the rates. The massive
sell off began back in 2021 when concerns about infaltion have been rising.
By the end of the year, investors already dumped some stocks like Netflix, many exited
their positions but the fed hanged on a little longer to the 0 percent interest rate.
However, beginning of March 2022, the fed made it clear that its going to crash the
market and bring it down together with ifnaltion and since then, anyone who doubted the future
also began massively selling off whatever they could before everyhing crashes further
which is exactly what happened. The sell off is probably over but stocks will
most likely keep declining for a little longer, especial ly when a recession is expected,
since Fed policymakers said they expect interest rates to climb to around 3.4% by the end of
this year, up from 1.9% they were projecting in March.
A rise in interest rates rises makes future cashflow less valuble which lowers the overall
value of companies, especially tech companies that are focused on bringing cash in the future.
I am not sure if the fed’s plan to keep hiking the rates will fix inflation since
infaltion is driven by other factors like rising energy prices due to Russia’s invasion
of Ukraine and supply chain problems but it seems like the fed wants to lower the demand
to the point where it matches supply. But not everyone agress with fed’s policy since
the focus should be on fixing the supply chains and not crash the demand. I guess we will
have to wait and see how everyhting will unfold. Thanks for watching and see you in the next
one.