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Poll: millionaires vs billionaires, who's more efficient at investing?

2 points by snitko ↗ HN
I had a curious discussion with a friend of mine. We argued whether a billionaire having, say $10 billion, would invest them at least as efficiently as 100 millionaires each with a $100m. I suggested, that statistically it is more likely that 100 millionaires would have a lower chances to fail, because they would at least have 100x more time and experience. So here comes the question, if the society really benefits from having billionaires? What do you think?

8 comments

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lecro
But I think that statistic approach does not work here at all.

Billionaires can be more effective with their huge market share (up to monopoly), resources and R&D potential. I have to mind that billionaire-owned Google and Microsoft have top revenue per employee in IT. Apple with billionaire Stee Jobs is at third place AFAIK. Can you add some other millionaire company to this list?

Besides, billionaire tends to be a succesful millionaire in the past.

mcav
For future reference: billionaires and millionaires.
snitko
yeah, already edited this, thanks. Obviously, I haven't come across those words often enough :)
mcav
Hopefully you end up needing to use them a lot someday. :-)
Mz
It seems to me that if they are self-made billionaires, they must have some very good rubrics for making judgement calls about such things to have gotten there to begin with and so might do better just because that's the kind of skills that made them that kind of money to begin with. If they all inherited it or won it in the lottery, laws of statistical averages might apply.

There's a great inspirational video called 212 degrees (that I assume most folks here have seen): http://www.just212.com/video/index.aspx It lists some of the very small margins of difference between first place and second place -- or even first place and no standing -- and the huge differences in payoff. I think billionaires are likely people who know how to fairly consistently make those small differences that pay off big.

eugenejen
The maths is some what weird. You have total 10 billions dollars with 1 billions but just 1 billions dollars with 100 millionaires.

Also you should not limit the combination to only 100. I am wondering if you extend the set to

1. 1,000 millionaires with 10 millions dollars.

2. 10,000 millionaires with 1 million dollars.

3. 100,000 affluent persons with 100,000 dollars.

It seems 100000 should be better than 10,000 millionaires. But it seems not the real case.

snitko
my fault again, there should be 100 millionaires with $100m.
iterationx
Some markets require billions of dollars to enter, like buying frequencies from an FCC auction, so I think that's and interesting an relevant discussion point.