Jeff Bezos Is Just $5B Away from Being the World's Richest Person | Hacker News Reader

Jeff Bezos Is Just $5B Away from Being the World's Richest Person

bloomberg.com

69 pointshuangc1066 comments

Has there ever been speculation as to who the richest person in the world is when taking into account private funds instead of just public? Would the list be any different?

Both Forbes and Bloomberg attempt to track private funds. If you look through their profiles for example, they list estimated private funds (non public stock holdings, such as cash, real estate, private business ownership, etc).

They generally leave royalty, dictators, and similar abnormal situations off the lists.

Why are Gates, Bezos, et al less abnormal than royales and dictators?

Heads of state often don't "own" their property the same way a private individual does in that they cannot liquidate their holdings. The Queen of England, for example, can't simply sell Windsor castle. The "personal" property of dictators has the habit of becoming state property on their death or fall from power.

Ummm... I think they sure can if public access to property is not allowed and if they wanted to. For example, why can't they lease out part of their property that only they have access for 1000 years lease which would be a "sell" for all intent and purposes.

Because then they wouldn't be royalty for long.

The Queen can't because her role is purely symbolic and she has no real power, but could e.g. Sadaam or Gaddafi when they were in power?

IIRC Putin has a lot of actual liquid assets as do many other plutocrats.

Putin has a lot of assets (possibly even the most of anyone), but nothing close to the full assets of Russia. Dictators can definitely use their power to enrich themselves greatly, but they can't capture the entire country's assets; they need to use a lot of the assets just to keep the country running and to stay in power. The people that help them to stay in power will expect to get something out of it for themselves. It's kind of like how you wouldn't count the shares of Microsoft that Gates gave away to early employees as part of Gates's assets even though Gates was effectively the dictator of Microsoft.

Nobody is saying you'd count all the country's GDP, only that their own richness is already as high as the others.

There is a fundamental difference between a gun and a dollar.

> They generally leave royalty, dictators, and similar abnormal situations off the lists

Did not knew that but makes sense... Dictators essentially own entire country and their income is whole GDP. That would dwarf business billionaire many times over.

Billionaires would still be near the top of the list if you compare them with dictatorship GDPs. ~80B puts you far above most small or poor countries.

Small countries, but there's still quite a lot of corrupt bigger countries. Russia, Thailand, Malaysia are the first that come to mind.

Dictators are dictators only as long as the military supports them. If you're the dictator of say, Egypt, and you decide to "sell" the Great Pyramids, I'm sure some people in the military would have a problem with that.

The "absolute" power of dictators also comes with terms and conditions.

Some people speculate Vladimir Putin.

http://time.com/money/4641093/vladimir-putin-net-worth/

Putin and his family are worth well over 100 billion. He has been stealing the wealth of the Russian People for decades.

I'm sure there are a number of old money families that control wealth of at least an order of magnitude higher. They are powerful enough to not make it visible and directly tied to them. Rothchilds are most likely effectively trillioners.

That seems hard to believe. I suppose if you start counting families you can get some pretty big numbers but trillions definitely is too high.

https://web.archive.org/web/20060115031554/http://news.indep...

"...to sustain their secretive fortune, which industry insiders count not in billions but in trillions, and keep it within the family."

Definitely unfair to count families though. The rothschild family has hundreds (if not thousands??) of members now.

Do you have your tin foil hat on? Intergenerational wealth breaks down relatively quickly when dealing with significant numbers of heirs to a family fortune. Most will probably still be UHNWIs, but that's it.

A family whose wealth was built by their knowledge of how to manage wealth let their fortune dwindle? If I'm a crazy conspiracy theorist for finding that hard to believe I guess I am.

As a family, they'll be worth a lot. But not that much. We're probably talking 100-200+ descendants over the centuries. Some will have done well in life (e.g. doubled / tripled / quadrupled their inheritances), others will have wasted it all.

You are speaking in certainties and making baseless assumptions to come to your conclusion.

So are you? The things I brought up are relatively common sense. Common sense aside, I also know several old money families (some 3rd generation entrepreneurial, some old 12th century EU aristocracy) and I'm partially basing my assumptions based on what I've noticed and what they've told me about similar families they know.

If you feel the need to prove the Rothschild family are trillionaires, go ahead + best of luck.

> So are you?

What certainty am I speaking in? I'm making a clearly expressed assumption that they are using their family core competency of managing wealth and not pissing it away.

> The things I brought up are relatively common sense.

If you mean common sense as in having no sense how to properly manage wealth. Which is what very few people on average understand.

House of Saud seems to have a pretty good grip on retaining wealth. Did someone say "trillions"?

https://en.wikipedia.org/wiki/House_of_Saud#Wealth

Yes, but simple math comes into play again. You've got to keep splitting the money among all those kids, and before you know it, each is only worth tens of millions.

House of Saud way of managing wealth is not the only option.

Meanwhile, I'm "just" 5B away from becoming the word's 324th richest person.

1. Bill Gates divides his money, half into his personal bank account[1], half into a tax shelter.

2. Various other people hover around the value in Bill Gates' unsheltered personal account.

3. "Bill Gates is passed up as the richest person in the world!"

Let me know when their net wealth exceeds the value of the wealth controlled by Bill Gates.

[1] metaphorically

If only every billionaire had a "tax shelter" that saved millions of lives.

http://www.businessinsider.com/infographic-is-bill-gates-bet...

thaumasiotes' point is not that Bill Gates is not a philanthropic individual, it is that most estimates of wealth are not accounting correctly for the total amount of wealth he has accumulated. He is simply using his wealth for more moral actions.

I'm not even talking about "the total amount of wealth he has accumulated". If he went spectacularly broke, that wouldn't take away from his lifetime earnings, but it would take away from his current wealth.

The Bill and Melinda Gates Foundation is under his direct control and the money goes where he thinks it should go. It's fundamentally identical to a personal entertainment fund. There is no reason to leave it out of estimates of his current worth.

We will never know the true opportunity costs of Windows being a closed-platform throughout the '90s and early 2000s, when they also actively tried to kill one of the only open alternatives.

This is especially true in this day and age when automation is about to kill a lot of jobs, and the people affected by this might have had a better chance at switching careers had they not seen computers mostly as black boxes when they were younger.

Or possibly they wouldn't have seen computers at all, because they would have been too complicated for them.

Microsoft making computers not complicated (which is debatable) and them trying to kill off Linux in the aforementioned period are 2 different things, not sure when we stopped looking at how most of Gates' wealth was built. Yeah, good for him that he's saving children in Africa with a part of his huge wealth, but as recently as 2015 he was still actively investing his money in fossil fuels and was spreading FUD about solar energy (old habits die hard, I guess). Here's one of the related articles: https://www.theguardian.com/environment/2015/oct/14/bill-gat... .

To be clear, are these estimations of wealth "money in the bank" wealth (minus liabilities), or "worth of assets in the eyes of investors"?

Things like stick price are, in my opinion, a fickle thing. Until you sell yours stocks/shares for money, their value is still shifting.

In that sense "wealth" is similar to "perception"/"confidence" - it's not the same thing, because you have to figure in market/investor hype/rationality.

What would you call "money in the bank"? I mean when you have this kind of money you cannot just put it in the bank... probably even at the kind of money a tech worker has. To my knowledge, these estimations are based on the worth of assets.

"money in the bank" means assets that might only vary by inflation/FX etc, not dependent on a specific stock price.

Based on value of assets, same as everyone else.

I'm questioning the nature of different 'value' across certain kinds of 'assets'.

"just" $5B.

It's closer to reality when you consider that this is a 6.3% increase over his current net worth.

But yes. It's a ridiculous sum of money to be thrown around casually.

That little B makes it so easy.

"Jeff Bezos Is Just $5,000,000,000 Away from Being the World's Richest Person" reads slightly differently

Yes, it reads like a click-baity headline. Read the HN comments. It worked.

Yes, he's worth $80 billion. So, what percentage increase does Amazon's stock need to increase before he's worth $85 billion? Wow, that could easily happen this year. In fact, in could happen in a few days.

Well, I'm just $1B away from being a billionaire.

You're closer than I am.

"Just"

I'm just a billion dollars away from being a billionaire.

that's closer than some people

Louis CK has a great bit about going into negative dollars when his bank charged him a fee for not having enough money. "Now I have negative ten dollars. I gotta raise ten dollars just to be broke. If something's free, I can't afford it!"

That's why in some statistics, 10% of the US population counts as the poorest people in the world. Starving people in developing countries usually have exactly $0, in the US most students finishing college are technically poorer than most of the world's population.

Doesn't reflect reality in any way though.

There's a story that Ivanka Trump told to a documentarian about how her father told her once that a homeless man they passed on the street was richer than them because of how much debt they were in. IIRC she told that story because it was supposed to demonstrate something about her family's humility. I always thought it was a pretty dumb thing to say.

His company's profits are minuscule by any historical valuation but Amazon stock is at an insane valuation. For this value to be justified he would have to become the world's only distributor of everything.

That's an extreme exaggeration.

Amazon's market cap at close today was $438 billion.

To match Google's earnings multiple, Amazon would need something in the ballpark of $14 billion in net income.

They're chugging toward $200 billion in sales. $14b in net income off of that is very reachable. Even if we apply a much more conservative premise to it, they're still growing above 20% - maybe it takes them $280b in sales to get to $14b in net income; they're going to get to that sales level within six or seven years plausibly. AWS alone is all but guaranteed to generate $5+ billion in operating income within a few years. The issue isn't whether Amazon will one day justify ~$400 billion, as that's very likely, it's how far from the future are the gains being pulled. 3 years? 5 years? 10 years?

Amazon has $136B in sales, which produces $2.4B in net income (1.7% margin). How do you get $14B in net income from $280B in sales?

With a 1.7% net income margin, Amazon would need $824B in sales to get $14B, compared to the $135B now.

As a reference, Walmart is largest company in the world by revenue at $438B. Apple $233B.

The P/E ratio tells you how many years to recover the cost of your investment. Amazon is at 187 years.

Great analysis and breakdown.

> As a reference, Walmart is largest company in the world by revenue at $438B. Apple $233B.

Weird that the catchcry for one is selling the cheapest crap possible, and the catchcry for the other is premium blend, no discounts. What about us poor folks in the middle? :)

You're either "aspirational", meaning that you shoot for the expensive Apple products rather than a simple run of the mill PC for status reasons, or you're "thrifty", meaning that since you've blown most of your cash on a few aspirational products, you can only afford Walmart for anything else you want to buy.

Yes, I'm being a bit glib, but there's some truth in that analysis. People in the middle do try to buy some higher end goods in areas they want to signal status on... they do so selectively, but if they can afford it and its a product that makes a desired statement, they go for it. An Apple product that a billionaire would typically buy is often the same model that a middle income earner can buy, yet everyone knows they aren't the cheapest things around. On the other hand, if you're buying expensive in one area, you're also probably buying cheap in other areas, so Walmart, Ross, etc. are on the table for the middle earner as well.

For middle of the road price/products there's less prestige so you don't get that and there's can be debatable quality difference... so... the appeal can be less for something middling.

I've read other market analyses that say basically the same thing - there's no money to be made in being a 'good brand', you'll do much better chasing either high-end market or competing on cost. That's why companies like Gap & Macy's are suffering, whereas each of Louis Vuitton / Burberry and H&M / TJ Maxx have been expanding like crazy.

An investor can get value from a company in other ways than net profit. For instance share buybacks, dividends, mergers and acquisitions, companies can pay back capital. P/E ratio is just one very simple number which is not applicable to all situations. For example REITs have often very high P/E because most of their profit is distributed as dividends. Using P/E to try to value Amazon is in my opinion misguided.

> For instance share buybacks, dividends, mergers and acquisitions, companies can pay back capital

Where will the money for all of this come from ?

Why the comparison to real estate ? Is your argument that assets held by Amazon will appreciate somehow in the future ? If so which ones ?

Revenue is the top line, net profit is the bottom line. There are many ways to get money out of a company which come before the net profit line in an income statement. Companies can also spin off parts of them in many different ways. The only thing I'm stating that P/E is often the wrong number to look at in a company.

7% margin on online retail seems pretty high

His company's profits are minuscule by any historical valuation

Because he reinvests all the profit back into the company. Which makes sense- what is he going to do taking money out of the company anyway? Unless you want to buy sports teams or donate it to charity, the only thing you can do with the profits is invest them, and obviously you'd trust yourself as the CEO of a sprawling company to invest it the best.

Reply on news.ycombinator.com