Jeff Bezos's Net Worth Just Broke $100B
bloomberg.com
bloomberg.com
Serious question: Considering that it nearly doubled over the past year, is it already too late to buy Amazon stock? Or not? What's the upside?
I think it goes to $2000/share soon (as in a few years). disclosure: long amazon
Even still Amazon has a crazy high valuation, just not insanely high. Not sure I’d bet against it though.
Your comment about reflecting the infrastructure in valuation would lean toward looking at Price/Book Value instead. Amazon would look quite expensive on this measure as well.
P/E = stock price / (earnings / # of shares oustanding)
And it actually does matter because a company can steadily grow EPS while not growing revenue meaning that something might be amiss, but it can easily be overlooked because EPS has been growing. Also, there are plenty of reasons not to want buybacks. Many times companies will buy their stock when it's at highs, thus destroying value for shareholders.
Example: you make a profit of $100. You use those $100 to buy the Brooklyn Bridge. Your profit is still $100. It's only your cash flow that's now at $0.
That's crazy high.
Even if AMZN could 10x their earnings overnight by stopping expansion or something, they'd still have a 30x - meaning way more than 30 years of future profits at this level.
Either that, or they'd still have to grow that much.
Stocks are in a clear bubble. Snap, AMZN, Tesla, and also BTC are stupid, and the world economy needs a correction just to remind people to do their homework.
And it's pretty rational to ask if there is much upside to Amazon - because there's a whole lot of downside risk now as well if financial markets decide that 300 is a 'dumb' multiple.
The market is clearly anticipating Amazon is going to get a lot larger yet. They're still growing at ~25% annually (minus Wholefoods), despite approaching $200 billion in sales. There's also no question that it's extremely richly valued here no matter what their growth is over the next five or so years.
Cloud services are also a competitive business and margins I think will erode eventually.
On a modest decline from the present rate of growth, they'll hit $300+ billion in sales in just three years. AWS should easily be at a $9b operating income annualized run-rate, at that point.
The common proclaim for years now, has been that there would be no margins in cloud services. AWS has always proven that wrong, all the way back. There's no reason to believe after 11 years, the margins are suddenly going to disappear. If the fierce AWS / Azure / GC competition the last five years didn't squeeze those margins out yet, then what would? It's more likely that the AWS margins will hold as they add more specialized services that are difficult for basic / smaller competitors to replicate (unlike eg standard compute or database services).
as a thought experiment, Lets suppose that everyone on earth is forced to invest 10 percent of their salary in their 401k and it has to be in equities. And they cant take it out until they are 90 years old. Stock prices would probably inflate 5-10 times current prices. Amazon would be 10 times "overvalued" in relation to profits. Would you not buy becauss of this? Of course not, Because people would continually invest in stocks and much fewer people are cashing out.
You can ask anyone, any individual, of course and they'll have a particular answer which will differ. But I wouldn't be quick to trust a particular answer over the answer of the market (which IS the stock price), unless the particular answer is from a particular person, like a buffett, a domain expert or an alien from the future or someone with insider knowledge.
At least, that's the theory haha. I know it's a shitty answer.
an individual with a billion shares has more of an impact on a share price than an individual with one share.
The fact is it is rarely too late to invest in a company if you do it prudently. The difference is Amazon being your portfolio - and being part of your portfolio.
Given its obscene metrics you shouldn't allocate a large percentage of your wealth in it. A good proxy would be index funds. You should really only have more of your wealth in Amazon than what would be allocated to it from something like an sp500 index fund if:
1. you are wealthy enough to take the risk
2. you are smarter than everyone else and know AMZN is a great stock
By the way, chances are you aren't smarter.
It might be wrong. But it has more money to have remain wrong, than you have to prove it wrong.
Maybe his motives don't matter. Maybe we just need to focus on getting basic income as jobs are wiped away by Big N.
Save the pitchforks for negative-sum beneficiaries - companies and individuals who benefit by leeching/destroying value (e.g., most financial "innovation", big pharma using legal tactics to avoid competition, etc.)
If the law doesn't require paying taxes, change the law. If people evade taxes they are legally required to pay, punish appropriately.
Don't demonize success doing beneficial things and obeying the law.
I recognized this idea in in the last two sentences of my post. The biggest issue with this line of thinking is the diversion of scrutiny towards Bezos in the process. As another poster stated, Bezos is a beneficiary of basic income via Amazon. As an aside, we know why Zuckerberg is more focused on free Internet drones over Africa than basic income.
It may sound like a bad idea that might put us in a communistic economic order, but just like UBI, we can perform experiments to see if a universal income-limit, UIL, has any negative impact.
But okay, Bezos will probably not be a proponent of that idea.
Yeah, but for long people were convinced that UBI does not stimulate people to work, but that is just not how it works (experiments show). If the incentive is there at the lower end, why not at the higher end? Why don't we run that experiment as well?
We might find out that if somebody is focused only on money, he or she does not make a good CEO. So the impact may be even better than just a financial one.
That mass unemployment isn't going to happen. The US is going to have an immense labor shortgage over the next 20 years in fact, no matter what AI + robotics do. It's extremely simple math: low population growth (that will get worse) + modest immigration rate (that will get worse) + modest economic growth + large number of retiring workers = labor shortgage for decades to come.
Besides, Amazon is hiring hundreds of thousands of workers, while its chief labor competitor, Walmart, is simultaneously not slashing its 2.3 million employee base.
$100B nearly 20 years ago, just before the federal antitrust case decision against Microsoft. Makes me wonder how much concentration of wealth would occur if regulation was not in place.
$20 Billion income a year
Lots of dividends over the years.
if this is lost value...I'd take it.
But yeah. 'In medio virtus est', etc.
Microsoft stock is worth more now than it was in 1999, and that's without factoring in dividends. e.g. this year it paid out $12b in dividends. Today's dividends are part of its valuation today, but dividends paid out ten years ago is just cash that's gone out of the company to an owner, reducing the value of the company, and isn't really part of today's valuations.
That is to say, he'd have received billions in dividend payments for two decades and he'd still own the same share of the company that's now worth more than it was in 1999.
The reason he isn't as rich is because of charity.
His parents became billionaires via their holdings in Amazon.
20 investors put in $50k each to start Amazon. Any of them that held up to this point, became billionaires.
You're confusing concentrated wealth, versus total wealth created. Amazon has plausibly created wealth for more investors, precisely because it has had fewer very large owners; more of the company was distributed into more hands.
I'm really surprised by all the hate in this thread towards wealthy individuals who worked hard to attain it. Especially in this environment, where people try to figure out ways to be one of them. It's HN FFs.
Also, maybe UBI just seems reasonable to Jeff, like it does to many people. He really doesn't need it for anything which he couldn't have many other simpler ways.
Not it wouldn't. Operating a Windows OS and being able to buy stuff online with one click does not magically make your country a first-world country. Just like country that runs on Linux and operate offline with brick&mortal stores is not automatically a third world nation.
We'd be better off with an economic system that values agency and lives worth living a little more than efficiency and profit, that ends up bio-hacking people to buy more food and mind-hacking people to control their attention.
I don't know how to help make that happen, but I'm pretty sure basic income isn't the right answer either.
https://www.gatesfoundation.org/What-We-Do/Global-Health/Mal...
https://www.gatesfoundation.org/What-We-Do/Global-Health/Dis...
> Working closely with other global programs at the Bill & Melinda Gates Foundation, the Discovery & Translational Sciences program aims to create and improve preventive, diagnostic, and therapeutic interventions for infectious diseases as well as other conditions that affect mothers, infants, and children. We do this by identifying and filling gaps in scientific knowledge, creating or implementing new technology platforms that can accelerate research in support of our goals, and investing in potentially transformative ideas.
> All of our investments advance the goal of creating solutions that can be deployed, accepted, and sustained in the developing world. To speed the translation of scientific discovery into implementable solutions, we seek better ways to evaluate and refine potential interventions—such as vaccine candidates—before they enter costly and time-consuming late-stage clinical trials.
There's nothing about fighting malaria that denies people agency in their well-being as far as I'm concerned.
Charity is basically a combination of guilt assuaging, ego food and social proofing. I think we'd be better off with democratically controlled funding, or economically allocated funding, from a self-sufficient demos, for things like the battle against malaria.
Charities like Gates's typically turn into long-lived foundations which acquire politics and agency of their own, not entirely benign. They need to be connected to their benefactors by some structure of control, like democracy or economics. A big pile of cash and investments isn't that; it's independence from control.
Yes, democracy also has problems, it would be great to figure out something better. But democracy is still better than oligopoly, even if they're benign today.
E.g. look at groups helping promote minority rights (civil rights movement, LGBTQ movement, etc). These were political no-goes, but small groups cared a lot about these issues, so they helped push them through, via charity and other means. If you were only OK with charity being done democratically, i.e. via majority rule, then these movements couldn't exist.
Yes, bureaucracy isn't efficient. But ultimately its decisions reflects the demos. If the people don't believe in positive government, it will be poor, like the US. But it isn't always that way (but it is usually still inefficient).
Lobby groups for minority interests are orthogonal to charity, or should be, otherwise money will buy more political influence than the demos warrants. That is, minority influence should be proportional to people involved, not money spent.
1. I'm not sure it's a great move to decide that people who disagree with you are wrong, or "diseased". (Obviously you're using the word disease metaphorically. Still, I think it's a bad attitude).
2. I'm not American.
As for the rest of your comment, I didn't say anything about the efficiency of bureaucracy. I'm not sure anything you said refutes anything I said.
"That is, minority influence should be proportional to people involved, not money spent."
I'm not sure that's a great measure. Minorities are by definition smaller groups of people than the majority. If the minority wants something the majority disagrees with (e.g. civil rights movement), then if we're weighting simply by the size of groups, then the civil rights movement probably wouldn't work. We should be also weighting by how much each group "cares", and money is, to some extent, a measure of that. Not that it's a perfect system, but is there a better one?
Btw, this is why democracy isn't just about majority rule - it's considered fundamental to democracy to also have minority protection and similar. Otherwise minorities would always lose.
So, charity. Any economic system rooted in the altruistic nature of man is doomed to fail. Only rational self interest in sustainable.
It comes back to teaching a man to fish. I don't think UBI solves the problem of how do you learn a marketable skill.
Maybe a program where investors can pay to train workers in exchange for a percentage of their income. This would create an incentive to train a highly skilled/paid work force. But it also has a modern slavery feel so idk.
What would you have the ultra-wealthy do? Give their wealth to the government? Distribute their wealth evenly to everyone? What is a non-problematic way to use concentrated wealth to help people, in your view?
I didn't say I knew how to do that. That's the hard problem.
This would be a start: how about ultra-wealthy advocate and lobby for a wealth tax, and stop feeding their gains through tax avoidance schemes?
All I know is that today, there's too much levering power in capitalist structures, that feeds too much surplus to owners of capital. I know all the arguments against alternatives; I want to preserve economic incentives, innovation and investment. But by the same token innovation is definitely reducing the utility of labour, and that's a problem that needs solving too. If every want and need in life could be produced automatically with no labour (the end result of innovation, where innovation has itself been automated), who would want to live? What meaning would there be in life?
At the end of the day the human animal is a tribal, social creature who wants to be useful to his or her neighbours, to make his or her way in the world with his or her head held high, knowing they make a positive contribution. That drive is ultimately not compatible with capitalist economics, which seeks efficiency and encourages consumption (the two, ironically, being in opposition to one another, ensuring that we'll never feel like we have enough, even if we didn't live on a hedonic treadmill).
Now, endless discussion on a topic when there's hardly any new information (as 24h news stations do), that's useless...
Did you know, the Stratolaunch has a wingspan wider than the length of a US football field?
The equivalent reply would be: geez, that's a terrible comparison, because the Stratolaunch is not a large plot of ground, they're entirely different things!
GDP is obviously not inherently measured in years. GDP has no set measurement period of time. GDP can be measured in quarters (and frequently is), years, decades, etc. It's most commonly measured in a one year span of time though, and it's likely safe to believe that's exactly what the parent was referring to. One should give people the benefit of the doubt on their intellect and knowledge, imo.
Put another way, yes Jeff Bezos could more than double the GDP of the country in question if he donated his entire net worth as someone else's income. But so could someone with a trivial sum of money (say a single U.S. dollar) by creating a series of dummy transactions with someone else where they constantly exchange the same sum of money back and forth for dummy "services." Yet at some level it seems weird to compare Jeff Bezos with this hypothetical person.
That being said, that's just an intuition. GDP is actually calculated as a dollar amount not a rate. As such I think there's still some worthwhile explanatory value in using GDP as a measure against static monetary amounts in the same way that you can say "this swimming pool has the same amount of water as the amount of water that flows over Niagara Falls in a day" (to the best of my knowledge such a large pool does not exist).
Despite the comically predictable replies such posts (GDP vs wealth) always get in threads like this, it's a perfectly valid way to relate size.
The parent didn't say they were the same (in my observation in seeing this same line play out dozens of times over the years, the parent comment almost never says they're the same). The replies are jumping to that assumption as a very low bar way to make themselves look smart.
It's no different than articles that routinely point out the size of a plane's wingspan or the height of a rocket, compared to a building or a football field. The point is to provide the reader with something to stand it next to mentally.
That's like saying it would make sense to compare a plane's wingspan to the speed of a bullet.
But as far as actual execution, yeah. SpaceX is way ahead and Blue Origin has been incredibly slow. Um, I mean "gradatim."
I know it's "political" but so is an individual having a net worth of $100 billion. It is well worth the watch unless, of course, you're a billionaire snowflake and don't like the reality that there are 500,000 homeless people and 45 million people living under the poverty line in America.
I’m sorry but your $20 is not the same as his $100 billion
http://www.opensecrets.org/lobby/clientsum.php?id=D000023883
He did save people a lot of money, but then he did also cause many stores to go kaput. So, how do you judge?
E.g. We have a legal system that decides when somebody is right or wrong, and it mostly matches with what people feel is right or wrong. Why can't we have a similar system that decides what somebody is worth?
BTW, as to the broader point, I mostly disagree - I think our current systems is pretty good at figuring out how much value each person has created, and letting them capture a portion of it. (That's what the system does, not "decide how much someone is worth")
You are basically saying that Jeff Bezos has created more than 100x the value of, say, Linus Torvalds, Richard Stallman, Guido van Rossum, and Donald Knuth combined?
I think you forget how achieving near monopoly status is like gambling, and how much it depends on being first to market, and about convincing investors (for years Amazon has run on a loss, not sure how they do now).
An interesting point. I think most of the above people have created a lot of value as well. It's hard to quantify, so I think it's possible that Amazon has created more value.
However, I think it's far more likely that, while they created lots of value, they haven't captured most of it back. Arguably, that's because they didn't try to, which is a totally reasonable decision for them to have made.
Yes, because going for money takes effort. This means that people who have hoarded a lot of money and wealth have spent time on capturing money and less time on producing value. Now we can ask, do we want to reward that kind of behavior by giving these people money and thus power, and wouldn't we get (i.e., select) better leaders if we assigned rewards based on true value?
Uhh, how so? Jeff Bezos's assets are worth what people are willing to pay for it. That's the definition of value.