> Bill Gates was last person to attain 12-figure fortune in 1999
$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.
Google and Apple and the inability of Microsoft to cash on both the web and mobile (where all the money was in computing in the 2000's and 2010's) is why Microsoft stock and Bill Gates net worth lost value. Not thanks to regulations but thanks to the market.
Well, to be fair, some of their inability to cash in on the web could be attributed to the regulatory hurdles (especially in Europe, but with global consequences) they faced in their attempts to push IE as part of the OS, etc. I do agree with you that market forces (courtesy of some wrong strategic decisions made early on and a willingness to stick to them for too long) were the predominant factor, though.
Are you talking about funding research, essentially? That's an example of wealth being spent on the common good. Problem is when it's accumulated without spending it on the common good, or even worse spent only on increasing the accumulator's power.
I don't think this has a lot to do with the antitrust case. His wealth simply peaked at the height of the dotcom bubble and then went down again because of the stock market crash in 2000.
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.
That's a flawed premise. Bezos owned less of Amazon at its IPO, than Bill Gates did at the Microsoft IPO.
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.
Bill Gates has also given a lot to charity, from the article - 'Gates, 62, who has a net worth of $86.8 billion according to the Bloomberg index, would be worth more than $150 billion if he hadn’t given away almost 700 million Microsoft Corp. shares and $2.9 billion of cash and other assets to charity, according to an analysis of his publicly disclosed giving since 1996.'
Meanwhile America looks more and more like a third world country thanks to the billionairs like Besoz and Gates that hog much of the wealth and resources of our country. By hey Amazon Prime and Microsoft 10 are worth it right?
It would look more like a third world country without guys like Gates and Bezos.
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.
> It would look more like a third world country without guys like Gates and Bezos.
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.
America (North/USA) IS a third world country; it just happened to be very rich third world country; although most of that wealth is borrowed from future (assumptions of earnings aka robbing our children).
Charity is problematic too, though. It's subject to the whims of the wealthy, and worse it's damaging to the dignity of recipients - it denies them agency in their own well-being. I say this having been the beneficiary of charity myself: needing to be grateful to someone else is a kind of psychological servitude.
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.
The charities that Gates tends to invest in don't just distribute goods to needy people. His charities try to tackle core societal problems like fighting malaria in Africa:
> 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.
The problems are not just agency, but also whimsy.
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.
I think you're wrong. Democracy is also subject to whims, but with the government, you basically have one player. With charity, at least you have "competition".
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.
The government is the people. It's a particular disease of the American public to believe otherwise.
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.
"The government is the people. It's a particular disease of the American public to believe otherwise."
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.
> We'd be better off with an economic system that values agency and lives worth living a little more than efficiency and profit
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.
> Charity is problematic too, though. It's subject to the whims of the wealthy, and worse it's damaging to the dignity of recipients - it denies them agency in their own well-being.
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?
You misunderstood my question: What should the ultra-wealthy, who exist in the here and now and will not be evaporating overnight, do if they feel like helping other people?
And I keep saying I don't know how. If I knew how to fix these problems, I'd consider becoming a politician or philosopher or finding some other way to influence the debate.
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).
Rockafeller got up to around $340 billion in today's dollar. Vanderbilt, Carnegie, and a few others built huge fortunes before the trust busters and regulation came along.
I'm beginning to wonder about Amazon in the long run.
I know it's sacreligious, but Wallmart brought most of their prices down to Amazon levels, and offer free shipping on orders over $35, and no Prime yearly fee.
Brick and mortar businesses are stepping up to the competition.
While AMZN might grow into their valuation eventually, there are many other equities that are seemingly undervalued given their current fundamentals. I wouldn't try to short AMZN, but I would look elsewhere for investment opportunities; and, while trite, the advice to invest using ETFs that spread your risk is probably a better strategy.
P/E is not a meaningful metric. The 10x rule of thumb doesn’t work for all companies. For one, not all companies have the same level of infrastructure—Amazon has a lot of warehouse and distribution infrastructure, not to mention all those AWS servers they own, etc. you should properly subtract that out before doing the calculation.
Even still Amazon has a crazy high valuation, just not insanely high. Not sure I’d bet against it though.
P/E is a very meaningful metric. It's not that Amazon has infrastructure that matters, it's that they are reinvesting their earnings at a higher rate than other companies. If they returned capital to investors because they didn't have enough potential projects, then the investors would need to decide how to reinvest it.
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.
My “not meaningful” point should perhaps been “can’t conclusively draw data from it alone” or “don’t make investment decisions based on this metric only” and I’d stand by that.
P/E is without a doubt meaningful, and looking at it in the context of growth i.e. PEG, makes it even more meaningful. Amazon is selling at an objectively absurd PEG ratio of 5. Anything over 2 is fundamentally considered overvalued by people who use this metric. However, You could argue that none of the fundamentals are meaningful because we are in a bubble, with Amazon on the forefront.
I generally prefer free cash flow yield (fcf / dollar invested), although both PE and FCF can be fucked with depending on how certain expenses are classified. That being said, if I had to choose one of the two, I would go with FCF yield every time.
It's also very common now for companies to buy back a ton of stock thus lowering the share denominator in the earnings portion of the ratio, while not actually growing revenue much if at all.
You are referring to Earnings/Share, not Price/Earnings. It doesn't matter much anyway, if they can make the same amount of money with less invested capital that should increase their metrics. And there are good tax reasons to prefer share buybacks over dividends as a way to return cash to shareholders.
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.
I agree, I should have mentioned free cash flow. Of course the real answer is to look at many metrics and get a broad picture. But I doubt you are going to find a "value investing" reason to buy AMZN at these levels, it's clearly a growth stock.
Increases in "book value" are reflected in earnings.
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.
The difference is stocks vs. flows. $100 capex only shows up in year one, but the balance sheet goes up permanently (depreciating of course). When the parent mentions "level of infrastructure" it refers to the balance sheet account, which is why I mentioned P/B.
It would take way more than 300 years of profits at the current level to justify the stock price.
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.
Amazon won't have a hard time eventually generating $20+ billion in net income (assuming very low net income margins of 5%). AWS by itself will hit $10 billion in operating income in three to four years. That business accounts for at least half of Amazon's present market cap. If AWS were a stand-alone publicly traded company, it'd have at least a $250 billion market cap right now.
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.
Walmart is at $425-$450 billion in traditional retail sales ($485b total), it very clearly can be done. Ecommerce will double over the next ten years in the US. Out of the trillion dollars in that ecommerce expansion, Amazon will very likely get at least a quarter of it. If you slow Amazon's growth down to something like 9%-12% avg per year over the next 10 years - which is very reasonable based on where they're at now - they're over half a trillion in sales at the end of that.
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).
Except stock price isnt intrinsically related to profits at all. So Amazon is $1100. Great. Does that entitle you to x% of the profits? nope. We just believe that stock prices should reflect profits but its just a false fabrication. Price simply reflects demand from stock buyers.
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.
Asking whether it's too late to buy I think makes no sense... if it were, immediately market forces would drive up the price. If it were too soon, immediately market forces would sell.
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.
The mostly efficient market. You can get far picking stocks at random, but that doesn't mean it's better than having some idea about what you're doing. But for the most part it's about risk, not price. Price is usually about right, it's what you can afford to risk. I think Amazon's price went up because investors think they're about to battle Walmart. Wouldn't hurt to put a little in on both those companies.
I personally believe in Amazon, but their metrics are indeed obscene. I don't own any stock, and won't buy any until it pulls back at least 10%, and even then I'd be analyzing why it fell the 10%.
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
It occurred to me last night that Amazon's next target could well be Google (search). I mean, how much money are they paying to google for ads? I could be wrong but I'd have to imagine they're Google'slargest revenue source now, possibly by a large margin. And they've got the expertise to do it in house. And I'm hearing more and more complaints about google these days. Amazon also seems more disciplined at listening to what users want than google is. I could see them first integrating it tightly with alexa, then calling it alexa.com, adding some spiffy new features and somehow pushing privacy as the number one thing (because they can because they aren't overly dependent on ad revenue, and because an amazon account seems more tangible than a google account (how many do I have) because they started in commerce and have your credit card and never tried to start a social network), then boom goodbye google.
Is search still a thing? I mean, these days content is curated socially or algorithmically and thrown onto your face. I only google errors these days and if I'm looking for a product I would search the specific sites that I shop at. Google will show me the sites I visit anyway, but with less nicer presentation.
I too am disappointed about this. Elon Musk is a scrappy bootstrapper by comparison. Blue Origin could be reaching so much further than they currently are...
Just because Musk can run both Tesla and SpaceX doesn’t mean Bezos can run Blue Origin and frickin Amazon at the same time. That’s overseeing 500k employees. I think that it’s a safe bet we’ll see a lot more from Blue Origin when Bezos steps down from Amazon.
Probably. I’m more complaining about ambition though. Blue Origin isn’t trying to change the game fundamentally in he way SpaceX is. Regardless o whether they are hitting deliverables, the deliverables aren’t interesting.
Blue Origin has just as ambitious goals as SpaceX. Millions working in space, industrialization of space to the extent that it actually starts reducing industrialization of Earth, etc. They even have a rocket on the drawing board somewhere, New Armstrong, that will likely be a 1-for-1 competitor with BFR, if not larger, and with full reuse (like BFR).
But as far as actual execution, yeah. SpaceX is way ahead and Blue Origin has been incredibly slow. Um, I mean "gradatim."
But don't they have different goals? I thought Blue Origin was a little more bootstrappy in that they aren't trying to rely on federal funding / subsidies and are trying to get revenue from tourism
I think it's more of a development life cycle problem, Elon started earlier and rocketry ain't easy. It's less a problem of money as it is in scaling up an R&D operation to effectively use the money. Scaling organizations of people is bottlenecked in enough ways that the added domain difficulty of rocket science creates a situation where throwing money at the problem has diminishing returns.
Is building rockets the most important thing? How about climate change, famine, education etc? I imagine the trick is to spend money on lobbying rather than solving the problem, to leverage tax payers money.
It's a perfectly good comparison in fact. Let me show you how that works.
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.
Eh I think the intuition the parent is trying to get at is that GDP is really in some sense a measure of flow, that is it is a measure of quickly money is exchanging hands weighted by how much money is being exchanged. Hence it feels more akin to comparing something like joules to watts rather than comparing the same dimension of two non-like things.
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).
Because there are very few things to reference, that most people have even a modest comprehension of, that have the scale of $100 or more billion.
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.
Bezos is an advocate for basic income, but I question his motives. Is it because he is genuinely concerned for others and society, or does he want to avoid the pitchforks at his doorstep when Amazon gets blamed for mass unemployment? Coupled with the fact that he's the richest man on earth, it's very apparent he will have a target on his back if he doesn't already.
Maybe his motives don't matter. Maybe we just need to focus on getting basic income as jobs are wiped away by Big N.
Realistically, BI won’t save him, or his progeny when/if it comes down to “pitchforks” any more than the French aristocracy could throw potatoes at starving peasants and hope to live. I can’t imagine how much good someone would have to do to justify concentrating a hundred thousand million dollars in their person. When so much of that probably wasn’t fairly subjected to taxation... well... maybe he deserves some “pitchforks” at his door, or st least some angry government accountants and lawyers.
This is just crazy to me. Every purchase at Amazon is made because it makes the purchaser better off. Amazon out-competes by serving the customer better. If Bezos also benefits, that's great - he's made the world a better place. I'd love to richly reward millions of people for making the world better like Amazon has.
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.)
UBI is an enormous boon to anyone who's business is directly sensitive to consumer's disposable/discretionary income. Bezos is the textbook definition of such an actor.
I'm not sure why his motivation matters? Both of those are good reasons to advocate for a universal basic income. We should want people to be aware of the consequences of their successes and to try and alleviate any pain they caused. It's when people don't do this that all the "rich is poor" problems occur.
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.
Where UBI provides a lower-bound on income, and preliminary experiments are showing that it has no detrimental effect on the economy, perhaps we should think about the opposite.
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.
It seems better to just have an actually progressive tax system. Effective tax rates on the rich are really low in the US right now. If there is an income limit there really is no incentive to make any more money so a progressive tax will probably give you a lot more taxes.
> If there is an income limit there really is no incentive to make any more money
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.
The sarcasm was not directed at him, but at us, and our lack of ability to come up with an economic system that can properly evaluate what somebody is worth.
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?
I'm not sure you're right. Clearly you don't feel it's right, but it doesn't seem like you're necessarily in the majority here, at least not in a way that is actionable. People may complain, but it doesn't seem most people are actually doing something about this. (Or at least, looking e.g. at the last elections in the US, there isn't necessarily a majority that agrees with you.)
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")
> 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.
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).
"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?"
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.
> 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?
The way I see it, all those people are probably making good money($100k+ annually) and there is research that shows that above that point it's all gravy. In that sense the free market capitalism system works.
It has some relevance as to the future. If Bezos was bleeding money, he might change Amazon's direction. If summer blockbusters started tanking, there might be fewer in the future. It's feedback, it's not necessarily the most useful information but it's not useless.
Now, endless discussion on a topic when there's hardly any new information (as 24h news stations do), that's useless...
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.
Jeff Bezos having $100bn is no more political than me having $20. Where you draw the line is completely arbitrary. Bezos didn't acquire his fortune by stealing from people. He made it by providing goods at a lower cost than his competitors. Which means everyone that helped make Bezos wealthy are wealthier as a result of that interaction.
I do not know how reliable this is but it looks legit. If it is true, Amazon spending almost $10 million on lobbying and is the 15th highest spender when it comes to spending. Top issue? Taxes. How is Bezos so f’ing rich? Amazon doesn’t pay any real taxes, prob less than 1%.
I’m sorry but your $20 is not the same as his $100 billion
While you may be completely right about Amazon and tax lobbying, this is only a part of the story of how he's so rich. Parent comment was right in the way that matters, IMO: Jeff Bezos being rich is mostly not at the expense of anyone else, quite the opposite - it's as a result of the value he's created. Even if he's paid less in taxes than he "should have", those taxes would've been 0 if he hadn't created the value and therefore wealth that he's created.
Just think: Someone with 1M bitcoin (which is conceivable if they got in early enough, hello Satoshi!) could overtake Bezos with just one more of those 20x increase in the price of bitcoin.
123 comments
[ 3.2 ms ] story [ 190 ms ] thread$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).
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
I know it's sacreligious, but Wallmart brought most of their prices down to Amazon levels, and offer free shipping on orders over $35, and no Prime yearly fee.
Brick and mortar businesses are stepping up to the competition.
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.
Of those four I can only see AMZN and likely Tesla lasting the next 10-20
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.
https://www.macworld.com/article/1039079/a9.html
It might be wrong. But it has more money to have remain wrong, than you have to prove it wrong.
But as far as actual execution, yeah. SpaceX is way ahead and Blue Origin has been incredibly slow. Um, I mean "gradatim."
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.
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.
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.
Now, endless discussion on a topic when there's hardly any new information (as 24h news stations do), that's useless...
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