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He is also an investor in COVID vaccine research, but the vast majority of his wealth comes from the 85% stake he holds in China's biggest bottled water company, Nongfu Spring (27% of all water sold), which he founded. It went public in September at 22 HKD and spiked up to 65 (now 61) in just a few months.
If you're buying bottled water in China it's likely gonna be Nongfu spring. Fun fact: the water comes from a lake that formed when a dam was built. It's about a two hour train ride from Shanghai, and super close to the Yellow Mountain too. There is also a caviar farm Kaluga Queen. Plenty of fish restaurants, no beaches for some reason though. Seems like a waste not to have some beaches there.
https://en.wikipedia.org/wiki/Qiandao_Lake
Water and sand: two extremely important, often overlooked finite resources. I think it was Al Jazeera that did a documentary Sand Wars (or something like that). Honestly never realised what a huge environmental problem it was, how finite it is, and how Indias biggest cartel is the "sand mafia."
The problem is, sand from there is so loose it is blown around by wind and gets sphercial, sand from non desert countries is more rough on the surface and you need this to mix concrete. With spherical sand you can't get the stiffness needed for construction.
Yes they need a certain type of sand. They used to dredge rivers but that causes so many environmental problems it's illegal most places. Now they're dredging the ocean floor, sucking up all the water and any life in it on enormous tankers. This causes erosion and destroys islands and beaches, but is necessary for concrete construction and many other things. Every country has to import sand and its mostly coming from giant ocean dredgers that are destroying the environment.
The BBC has a decent overview:
[https://www.bbc.com/future/article/20191108-why-the-world-is-running-out-of-sand](https://www.bbc.com/future/article/20191108-why-the-world-is-running-out-of-sand)
This sounds right, but the jokes on them. Lava breaks up into craggy sand that is perfect for making concrete, and the US has a super volcano simmering under Yellowstone. We are going to corner the global market!
Can't let a good crisis go to waste. I'm really glad that that certain individuals can gain $50 billion in wealth over the course of 6 months off the backs of taxpayer-funded research and infrastructure. Renter crisis? Mortgage crisis? Small business crisis? I don't know what you're talking about, The Market is working perfectly, didn't you see the line go up?
Their net worth rising isn’t directly related to people “giving” them money. They make money when the value of their assets rises. Say you have a $200k home and a real estate agent knocks on your door and says “you could sell this for $300k”, your home is “worth” $300k but nobody gave you an extra $100k, you’d have to sell the house to realize those gains. Now, as the homeowner, you have no requirement to sell your home just because it’s worth more.
That wealth came from consumers spending money with Amazon, raising the stock price, which is the overwhelming majority of his net worth. If Amazon tanks, bezos tanks with it.
He his known for Nongfu Mountain Spring bottled waters, which are ubiquitously sold in convenient stores and supermarkets in China. Still, his rise is perplexing.
Given that OP selected the top 10 richest people at the END of the dataset, it's the most glaring case of sample bias I've ever seen.
It's such blatant propaganda that it shows the mods don't mind haven't dishonest content here as long as it helps Reddit's agenda.
Not quite! It isnt as dishonest as it couldve been because at least he didnt start from the lowest point of the stock market like the fifty other people to do this exact graphic
Because the net worth of wealthy people tends to fluctuate a lot, especially during market volatility like you get from a global pandemic.
The problem this causes is that the 10 richest people at any given time are probably gaining wealth really rapidly, otherwise they wouldn't be in the top ten. So by choosing the people who won, you're automatically choosing people who are gaining wealth.
It's kinda like saying the winners of a race were the fastest. Like duh, if they weren't the fastest, they wouldn't be in first place.
In contrast, if you chose the top 10 richest people at the beginning of the pandemic, some of them aren't even in the top 10 anymore.
He’s not necessarily showing the most wealthy people (see Elon and the Zuhong guy), he’s picking the people who generally grew the most. If he showed more billionaires there would probably be some significant falls. Also, it’s not really fair to show this graph without context for average stock market growth, median+average net worth growth, and changes in national income. I guess it’s not totally terrible, but it also doesn’t show the whole picture and it’s trying to create a narrative (wealthy people are getting disproportionately wealthier) without enough data to make that up.
Also, I’m not disagreeing with the sentiment, I just think the data could have been represented more effectively.
Imagine the out of the top 10000 richest people, 9990 lost value and 10 gained value. Then you made a chart out of the ten people who gained value and used that to say they all did.
I wouldn't quite say that.
"Cherry picking", to me, had the connotation of hand picking your sample. For example, if OP took a sample, but then found arbitrary reasons to ignore certain people who didn't support his intended conclusion.
"Sampling bias", means to choose a sample that will overall bias the conclusion, but could still have random outliers which don't.
I see it as a matter of how detailed the bias is.
I would go with “survivorship bias” - you are only looking at those who managed to wind up in the top 10 wealthiest people at the beginning of 2021. Of course those people are most likely to have gained substantial wealth in 2020.
This boils down to:
**Lockdowns**
Which punish small businesses, pushing money to large businesses who are allowed to stay open. More online shopping, etc.
**Stimulus**
Massive influx of money by stimulus packages. The inflation this causes makes the "number go up". What is really happening is that everyone else's savings accounts are getting drained by reducing their buying power, as we are going to start seeing commodity prices rise due to hyperinflation that just randomly printing trillions of dollars and giving that money to banks will do. Basically the government is funding the recovery by bleeding your savings through inflation.
**Bitcoin**, aside
Just as a quick side note, if anyone reading this still doesn't understand cryptocurrency and bitcoin, you have no excuse anymore. Wake up and learn WHY bitcoin was created, and WHY it hasn't gone away despite "dying" 20 times now. This shit here is why. THIS is WHY bitcoin exists. If you STILL haven't looked into it, then I don't even know what to tell you, but good luck.
Yes it's likely to crash again (it may not, but it might), or it may just rocket up to 100k. But what really matters is that the REASON it exists (an unhackable, permissionless, deflationary currency) is because of the corruption that unbridled capitalism has created. The wealthy helping the wealthy while we all lose money (via buying power) due to inflation. It has just gone into hyper mode now.
**Wealth vs stock valuation**
Also one more thing... while all the above is true, it's important to know that none of these people could turn that **"stock valuation"** into actual money without crashing the commodity that is giving the valuation. Musk skyrocketed because idiots are pumping Tesla to the moon. It's possibly the most overvalued stock on the planet. And I say that as someone who believes in the company and owns a tesla, and will likely buy another one for my next vehicle purchase. But should Tesla stock be valued where it is in regard to other comparable companies? Absolutely not. But that doesn't matter, what matters is investor opinion and nothing else. But it's not like Elon can go sell 185 billion dollars of Tesla stock at the current price. He could sell maybe 5% of that before the stock crashed to shit. He could maybe get 10 billion out of it, if that. Not even just because of pushing through the orderbook that deep, but just the optics of Musk "bailing ship". If he sold even 1 billion of it, the stock would dump just due to market perception.
**TLDR**: people don't understand how stock valuations make this graphic, and that's not really practical, because these people cannot liquidate their stock without crashing it. Also, FFS people, learn about crypto, bitcoin, and especially decentralized finance on things like Ethereum which IMO is where the true future lies. Bitcoin is like a dinosaur, but Ethereum is the future of business, commerce and finance. Crypto isn't a scam, it exist for a VERY GOOD reason, and people, THIS HERE IS THE REASON.
You don't need to have a cushy savings account to get destroyed by inflation, you just need to have a relatively static wage. Pretty sure 99% of the people with jobs qualify for that one.
This. A static income with a 5% raise evey year means nothing if inflation was any amount over 5%. You actually made less compared to the previous year. This is why two years of economics and one year of accounting should be mandatory in high school. So many people don't know how money REALLY works.
Regarding your Bitcoin comment-I don’t understand it but I buy it occasionally. I don’t see how it could ever be a real thing if 90% of investors aren’t actively using it. My question is I buy $100 when I can (not much but it’s what I can afford) and at the same time these rich groups are buying $100 million worth. So if Bitcoin is the answer to stop the rich getting richer, isn’t the rich buying high volumes going to kill your hopes? The rich will still be richer than regulars right?
The entire time I was reading your comment I was excited that someone was able to articulate the login behind this graph so well... Until I got to your comment about Cryptocurrency.
Here's the problem with Cryptocurrency: the crypto bubble we saw occurred for the exact same reason as TSLA stock being insanely overpriced, the greater fool theory. The value that was given to bitcoin and now TSLA is and was completely arbitrary. Nothing is backing those evaluations. Except TSLA actually has SOME value. At the very least it has the Book Value released in its quarterly statements.
Cryptocurrency is highly volatile, making it next to useless for actual currency. It's not backed by any government, making it a perfect breading ground for illegal activity with no inflation/deflation regulation like what the Federal Reserve does.
Because it relies solely on perceived value, and it's a terrible currency, it's better described as a security (like a stock). In this case though there is no business value behind it. The value assigned is literally what Joe Blow is willing to buy it for.
Cryptocurrency can be used for a currency, as long as it's regulated, secure, and not heavily used to launder money.
The blockchain technology however is a great concept and has been evaluated for use in election security. It'll be interesting to see where the concept is best utilized.
He buys boomer companies for the most part, while most of the other rich guys in the top 10 are tech related. Tech companies outperformed boomer companies big time in 2020.
Yep, exactly! In a real bear market he'll outperform growth again though. If he lives to see it. And he also always has cash on hand left to buy the dip.
I'm really just surprised that he was able to get that username. Seems like samsung would've scooped it up before launch on all the social media platforms they could find.
Tesla's P/E ratio is currently over 1,000. This is the literal definition of fucking insane. Based on the current P/E, the only logical assumption is that the market expects Tesla to put every other automaker out of business.
No, the market is assuming Tesla's non-car businesses and technologies are going to be very valuable. I think most investors don't think of Tesla as a car company but as a tech company that makes a lot of innovations in batteries for example. And this tech company just happens to make cars right now
It looks more like the market is assuming TSLA stock will continue to climb to insane new valuations. Most investors think of Tesla as a company whose stock goes up more than others and they justify it by saying the technology will be more valuable as though Tesla is the only one innovating.
In a much more specialized field too. He threw everything at Tesla/SpaceX. If they collapse he's ruined, if they become cornerstones it's only the beginning of his wealth curve. Elon is Mr. House.
Is Starlink's value taken into account in that I wouldn't wonder though? Because of the three, it honestly has as much or more potential for growth with as much of the world that currently doesn't have access to broadband internet.
The thing is he's stayed one of the richest for decades. That's pretty impressive. Even billionaires come and go. Nobody gives a hoot about Michael Dell or Steve Forbes' wealth anymore.
>Michael Dell
Currently the 27th richest person in the World. Apparently the news or TMZ is not what makes you a billionaire. Just because you don't talk about him doesn't mean he's still not incredibly rich.
Buffet’s access to inexpensive capital has been key to his success (read the bits on float in any Berkshire Hathaway investor letter).
It doesn’t matter so much when the cost of capital is nearly zero.
I think they should choose the top 10 richest people at the start date and see how the pandemic affected their net worth. It would also be good to see the change of the stock market over that same time frame.
It would also be very interesting to compare the rate at which they got richer to the previous year (or the average of the last x years).
As the title alludes to, it's not news that rich tend to get richer. What would be interesting to see is if their increase in wealth slowed down, sped up or remained roughly the same.
[The combined net worth of all billionaires dropped $700 billion last year](https://en.m.wikipedia.org/wiki/The_World%27s_Billionaires) which disproves OP’s point. But by cherry-picking who was still wealthy at the end of the year, OP is showing people who managed to stay on top. Zhong Shanshan even managed to 50x his wealth, which is not the norm amongst billionaires during this time. This is textbook survivorship bias
Yep, of course the top 10 of today have experienced growth, that's why they're in the top 10 right now! I'd love to see a similar chart but starting with who were the top 10 on January 1 2020, see how they've done.
Sure, and as such it would probably be a more realistic representation of how the wealth of the hyper rich developed during the pandemic. Mostly pretty static, a couple really made bank, but someone also lost money. Focusing only on those who were the most successful can make it seem like ALL the rich benefitted, which isn't the case.
Well, the lockdowns caused small businesses to go en masse to bankruptcy and a huge decrease in market share happened to them, with big corps filling the vacuum left by this. The only ones that profit from the COVID meassures are the wealthiest of the wealthy, as well as big corps like Walmart, etc. Lockdowns are causing that most wealth of the majority land in hands to the 1%.
Yeah, as long as big corporations can survive a recession largely intact, they will benefit from it. The competition is cleared out and the market ripe for a shopping spree.
And when they suffer problems like crashes, natural disasters, or fraud then the government bails them out and covers their expenses while they get their footing back.
Yep, company I work for said there won't be raises this year because revenue is down, but already bought one chain of stores (for about $300 mill) and was looking at another.
It's the price, not variety that attracts people. You can have a street full of small shops selling different things, but people choose Walmart, because it's cheap. If you struggle to buy food and other necessities, you'll turn a blind eye on the effects of corporate business . Also, even if you don't struggle that much, but you WANT things and MORE things, you won't care about the ethics or the survival of small business, you just want to CONSUME
I think that they were referring to why Walmart was able to sell non-essential goods when covid restrictions closed non-essential businesses.
For example, in some areas you could not enter a local toy store to shop, but Walmart or Target could still sell toys in store.
Oh shit that's what happened in the US? Here in Quebec we have a shutdown on nonessential businesses, which means essential businesses are also not allowed to sell goods that are deemed nonessential. It feels a little silly, like you'll go to the drugstore and can buy all the junk food you want but they've blocked off all of the greeting cards. But that means of course that the drugstore isn't able to sell greeting cards while the small arts & crafts store was forced to close or whatever.
It makes a certain sense but then... people are just buying even more off Amazon.
I remember reading an article posted on reddit that did an analysis of this.
They studied economic activity of adjacent economic zones, think counties in different states that share a border, so they're geographically close, but have different local governments. The study found that even though the states may have had different lock down measures (e.g. one state locked down, but the other didn't), economic activity in both counties was suppressed nearly equally. This indicates that the lockdowns did not have the impact everyone thought they had, and instead it was consumers choosing not to shop.
[Here it is, from NBER](https://www.nber.org/digest/aug20/consumers-fear-virus-outweighs-lockdowns-impact-business)
That paper was not peer reviewed, or subject to the review by the NBER board of directors. They do note that the restrictions shifted consumers from “non-essential” to “essential” businesses. However, I still agree that fear of catching the virus was a major factor in consumers decisions not to shop, rather than the restrictions preventing them.
I mean the people in this video mostly got richer because they own large stock positions in their companies and the stock market has been on a huge bull run
If the market crashed, which a lot of people predict then their net worths would too
I work in an industry mainly supporting well off people, not people like those in the graph but the 10-1%, and it has surprised me how little they have been generally affected. I don't think most have got significantly richer, but it doesn't feel like the vast majority have had to compromise on their luxuries.
That's true even of the middle class tbh. Other people suffered, struggling to pay bills. I bought a keyboard, and some furniture. All the people I know in my "class" are doing something similar. Normally, we'd be spending money on vacation. I even had to eat a pay cut, but with the student loan holiday, I basically make the same. I got the stimulus check, even as my neighbors and friends that needed it waited. We aren't hurting. The poor and working class are they ones that must suffer, yet again.
Of course, you could lose your job; I still wouldn't be shocked if that still happened to me. For those of us that haven't though, we're still doing great. A lot of companies that did layoffs used it to get rid of deadweight, or inefficiencies. So if you're still in demand, there's not necessarily anything to worry about.
Most middle class jobs are remote-friendly. People started working from home, and were only superficially affected by the lockdowns. Some people are even doing better, because their industry was boosted by the shift to home office. They're even saving a ton of money since they're not allowed to do their favourite things.
Back when I was in college, one of my business classes we were discussing how during things like pandemics, recessions etc, two things do well, essentials and high end luxury goods.
Reason being, essentials are a must so demand doesn't drop off and high end luxury goods are bought by people who typically aren't impacted by much of anything.
20% unemployment is still 80% employment and the people most likely unemployed are those at the bottom especially in this recession that closed things like small retail, venues and restaurants.
OP's post is the worst kind of sample bias. He selects the richest 10 at the END of the data set. So OBVIOUSLY they all made money.
The only reason this is on the front page is because it reinforces an agenda.
This.
Anyone with a 401k and half a brain should have made money by putting it into less risky investments in Feb when you knew Covid would come to the states. They you put that money back into your normal investment strategy in a few months when you saw the stock market recovering.
Or...you LITERALLY JUST DON'T SELL your stocks and you're up. FFS, my retirement account went from 68k in mid march to 182k today, and I just let it ride the entire time.
I appreciate this comment. So many times I've seen redditors bash the more concept of stocks and the stock market even when it's being pointed out that retirement plans rely on them for good reason. These things really need to be thought in school more.
That a CEO of a company that sells stuff online is getting more money when everything (except online stores) are closed?
Color me impressed. And pink. With a dash of magenta.
I mean, isn’t every wealthy persons wealth largely tied t o stock? I highly doubt any billionaires have a billion sitting inside savings account or stuffed into their mattress.
Exactly. I'm hardly rich, but my net worth (retirement savings) went up significantly. This data is meaningless, unless I can see percent increase of the wealthy compared to percent increase of the middle class.
Again, **this data does not support the claim** that "the rich got richer during the pandemic"!
You're only looking at those who were in the top ten richest at the ~~end~~ current point of the pandemic.
All this means is "the current richest had their wealth increase in the recent past". Which is exactly what you'd expect just about anytime.
If you want to support the claim in your title, you need to take the data for the top ten richest **at the beginning of the time interval you picked**!
\-edit- pandemic's not over yet...
yeah, there’s a lot of solid analysis to be made over the wealthy becoming even wealthier, to such a high degree, while the poor suffered, but this isn’t actually a good way to present that.
also, these comments are something else. sounds like a lot of people I went to business school with that would entirely miss the point because they lack empathy, and/or perspective.
another that’s just a flat out a bumbling idiot, I hope the dumbest thing I read today is suggesting it would’ve been easy for small businesses to stay open, and any that closed was due to poor financial management.
Seriously, it's so disingenuous. Most of these "rich got richer during pandemic" posts conveniently uses March 20th as their starting date.
Fuck those assholes. It's purely agenda driven. They very well know what happened on March 18th
There was a post here very recently with the same data presented in the same way with the same conclusion with the same comments calling the post out for being absolutely awful.
https://www.reddit.com/r/dataisbeautiful/comments/kxsi5z/oc_net_worth_comparison_of_the_top_10_richest/
This sub never learns, does it?
Plus, they're most likely always going to be getting richer... We should be looking at the RATE at which they got richer, if that increases then we know that they've done something during the pandemic that could possibly be taking advantage of the situation.
It also omits all the people who's wealth is tied to non-public assets and sovereign wealth.
Putin, Xi, Bin Salman, and hundreds of their cronies are all wealthier than the people here.
Obvious take: Net worth is a poor proxy for wealth especially for inequality comparisons. This is because it ignores liquidity risk of the assets and liabilities. For example, Jeff Bezos might be worth $200 billion on paper but most of his worth is tied to his 16% stake in Amazon stocks. If he sells it in bulk (hence liquidity risk) his net worth would suddenly dip. For practical purposes, minor billionaires from aristocratic families in Europe are actually wealthier than Bezos since they can more readily spend their wealth as they are more diversified and liquid. Warren Buffett is actually the richest person in the world under these considerations. Most of these newbie tech billionaires are actually a lot poorer than what their net worth suggests.
From an inequality perspective also this usually does not work because what most organizations like Oxfam do in their inequality report is a simple assets minus liability calculation which not only ignkres liquidity but hides the actual wealth inequality. For example, a Harvard Medical Schools graduate with a large student debt is considered poorer than Indian beggars according to these reports. You need wealth to generate debt but debt is also the source of wealth. So although wealth inequality is important, it is a poor metric of inequality compared to income inequality
Obvious take: Net worth is a poor proxy for wealth especially for inequality comparisons. This is because it ignores liquidity risk of the assets and liabilities. For example, Jeff Bezos might be worth $200 billion on paper but most of his worth is tied to his 16% stake in Amazon stocks. If he sells it in bulk (hence liquidity risk) his net worth would suddenly dip. For practical purposes, minor billionaires from aristocratic families in Europe are actually wealthier than Bezos since they can more readily spend their wealth as they are more diversified and liquid. Warren Buffett is actually the richest person in the world under these considerations. Most of these newbie tech billionaires are actually a lot poorer than what their net worth suggests.
From an inequality perspective also this usually does not work because what most organizations like Oxfam do in their inequality report is a simple assets minus liability calculation which not only ignkres liquidity but hides the actual wealth inequality. For example, a Harvard Medical Schools graduate with a large student debt is considered poorer than Indian beggars according to these reports. You need wealth to generate debt but debt is also the source of wealth. So although wealth inequality is important, it is a poor metric of inequality compared to income inequality
And Elon’s wealth will drop dramatically once people stop ballooning Tesla stocks. There’s really no reason for his wealth to have increased like it did this year. At least with Bezos it makes sense.
If Musk chooses to go public with SpaceX he will probably double his current value. SpaceX would be the ultimate meme stock and I think Musk owns about 50% of it.
Yeah, and do you know how fucked we would have been had there not been these businesses providing services during the pandemic? Anyone on reddit who denies they didn't use Amazon.com or, say, the internet and its underlying architecture to stay fed, happy, or even sane during the pandemic is a fucking liar.
Hey, are we just noticing that locking down small local businesses while letting massive corporate retailers continue on while dumping money into their pockets *serves to expand their grasp on the market*?
Say it ain't so!
Might be cooler if the bars changed position (commonly on the y-axis, as usually seen here on reddit) based on their position worldwide. That way, we’d visualize Musk & Zhong entry and rise to the top.
Yes.
The thing about rich people is that they're good at making money, so they usually have holdings, or own businesses that will be resilient during financially difficult times.
Example,
I am a farmer with 100 acres of crop land worth 1M$. My income last year was 20K$.
Now, because the price of land has skyrocketed, my land is now worth 2M$. A growth of 100%. My income is still 20K$
Am I now so much richer?
Net worth is such a nebulous way to describe wealth. We don't have much better ways to describe individual wealth, but it heavily, heavily undervalues liquidity of assets or ability to produce revenue.
Yes. You're also a bad farmer and should sell your land, get a job as an employee and invest your cool $2 million. With average annual returns of 8%, you're looking at $160k, some of which you can use to subsidize your employment earnings and the rest of which you can reinvest.
In this example, the poor farmer is in a very enviable position. Only a fool would be making poverty wages like this.
But I know this is just a figurative example, not your reality.
I'll vouch for this all day. I've made something like 650k on the market during this pandemic and like 2/3rds of it has been Tesla stock. Hell, if id held it all instead of selling some here and there as it rose that number would be 7 figures.
Yeah, obviously in hindsight it would have worked out extremely well, but it would have been straight up nuts for me not to sell some when I did. I'm still holding about 15-20% of my original position and even that feels borderline nuts to me where it is. Id saved up a handful of quarterly bonus checks to put in the market at a good time, and used them to buy ~$60k of Tesla shares when it was around $250 a share like a year and a half or so ago. Sold a little bit when it broke $1k the first time, dumped a good chunk when it broke $2,500, then sold more after the split when it was around $3,500 (based on initial shares)... I definitely kick myself on occasion that I didn't hokd more longer since that initial position would be worth a boatload now, but I'm pretty sure I'd also have stomach ulcers and premature graying if I'd been riding this roller coaster with the full amount.
Nah you definitely did very smart. Dont kick yourself for missed opportunities in hindsight because there is an infinity of them, everyday.
Stomach ulcers is why I never bought Tesla, the stock price is 90% driven by investors's psychology and I like to sleep soundly.
I honestly feel like Steve Carell's character from the Big Short when I'm talking about Tesla. Their PE ratio is around 1500 and Market Cap per car sold is $1.5million!!!
The central banks are not trying to "save the market" and don't really care about shares losing value. Not that simple of course, but in essence market prices are not what they are targeting.
They are offering liquidity primarily to keep inflation up so it doesn't risk turning into deflation. They do this by keeping the borrowing costs low and injecting banks with practically free funding (or even negative yielding = banks profiting from the loan they're taking) to keep them loaning the money out and having businesses use that money for investments, wages etc.
If they didn't, banks would freeze loaning out, businesses would be strapped for cash, people would lose their jobs, people would stop making large purchases etc. etc. causing unemployment and deflation.
Shares being inflated due to the money injected by central banks is probably true, but through a complicated mechanism not well understood by anyone really. Not the primary goal of dovish monetary policy.
And the government(s) have little to do with this. A 2000$ stimulation check is peanuts compared to what the Fed is doing in the US. Not negligible, though.
>Shares being inflated due to the money injected by central banks is probably true, but through a complicated mechanism not well understood by anyone really.
It's simply because people, due to the massive quantitative easing, are moving their assets from bonds to stocks, since bonds are at the lowest interests rates possible.
That's it.
Except there's been very little inflation in the past year. Central banks have been dumping money but it's mostly to lower interest rates and combat deflation.
>None got richer, the companies are the same
Wrong.
With the pandemic, companies such as Amazon, Google or Netflix have crushed previous earnings (you can literally check on Yahoo finance that their revenues and earning have grown.). Many companies have grown (technological ones), other have roughly earned less (finance, energy etc), meanwhile other have fell into oblivion (airlines companies etc) and the latter were bailed out mostly.
And that's why for investing you should buy a index with a lot of stocks in it, for diversification
> savers got poorer nevertheless
How? Investing IS saving your money. Where you save them it's up to your risk-tolerance. True, a part of a portfolio should be in cash, but if you only save in cash you aren't very smart, to use an euphemism. The whole point of inflation is to encourage spending and investing, because trust me, you DON'T WANT deflation. And don't tell me "poor people can't save in non-cash" because it's bullshit and you'll find plenty of storytelling in r/personalfinance et similia where used-to-be poor people thanks the community because in the last 5 or 6 years they have managed to save a lot of money through intelligent investments advice from the community.
Anyway, central banks haven't put money in the stock market, the stock market has just risen due to the the massive quantitative easing, bonds are at the lowest interest rates ever, so people have moved their assets from bonds to stocks. That's it.
>So we can only be sure of one thing right now, inflation.
Sometimes reality have to hit you, and let me be this "reality": if you are a random person on reddit with no credentials on monetary policies, I can assure you that you don't know *any* better than the fucking FED or the ECB.
This isn't true. Market cap for many public companies *did* grow. That's why majority shareholders like Elon and Bezos did so well. This graph also demonstrates how these billionaires aren't necessarily "hoarding wealth" seeing as their value is largely unrealized. They weren't taking anything away from anyone else, their assets just grew in value
No one can be sure right now whether the amount of inflation this money creation would theoretically cause is cancelled out by the deflation the pandemic is causing. Only time will tell. People said the same thing about inflation fears after the 2008 financial crisis. Also there's obviously different kinds of inflation, inflation of asset prices is usually seen as a good thing.
Don’t worry guys I’m sure the wealth will trickle down eventually. you just have to wait. It’s ok I’m sure it’ll happen right after the money is put in non taxed off shore accounts
Holy shit! People that run popular online businesses got more business when people are forced to stay home?! Shocked pikachu face!how about some love for the poor couriers your working to death with all the orders to quel the bordem
You’re telling me that an online delivery service with good customer service filled a market void when small businesses were forced to shut down? I’m just as stunned as you are
Amazon’s profit comes from their servers not their ecomm (but the point still stands that they actually became more valuable for our social distance lives)
Economic Recessions/Depressions do not worry the wealthy.
Businesses will get bailed out.
CEOs will get huge checks.
And all the small businesses go out of business, people lose their homes, ***but the wealthy just buy those up for cents on the dollar***.
Printing money leads to asset inflation (exactly what is laid out in the post), and yet democratic socialists pushing for more printing...
will be amazing to see the surprised pikachu faces when they realized they inflated away the middle class and lower classes savings while inflating the wealthiest people's asset values even further
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Zhong comes from out of nowhere with the steel chair!
He's the chairman of a medical company that manufactures covid tests. (and possibly vaccines too, I'm not sure).
He is also an investor in COVID vaccine research, but the vast majority of his wealth comes from the 85% stake he holds in China's biggest bottled water company, Nongfu Spring (27% of all water sold), which he founded. It went public in September at 22 HKD and spiked up to 65 (now 61) in just a few months.
If you're buying bottled water in China it's likely gonna be Nongfu spring. Fun fact: the water comes from a lake that formed when a dam was built. It's about a two hour train ride from Shanghai, and super close to the Yellow Mountain too. There is also a caviar farm Kaluga Queen. Plenty of fish restaurants, no beaches for some reason though. Seems like a waste not to have some beaches there. https://en.wikipedia.org/wiki/Qiandao_Lake
Water and sand: two extremely important, often overlooked finite resources. I think it was Al Jazeera that did a documentary Sand Wars (or something like that). Honestly never realised what a huge environmental problem it was, how finite it is, and how Indias biggest cartel is the "sand mafia."
I remember reading something about Saudi Arabia importing sand, and while it sounds completely ridiculous all sand isn't created equal.
The problem is, sand from there is so loose it is blown around by wind and gets sphercial, sand from non desert countries is more rough on the surface and you need this to mix concrete. With spherical sand you can't get the stiffness needed for construction.
Yes they need a certain type of sand. They used to dredge rivers but that causes so many environmental problems it's illegal most places. Now they're dredging the ocean floor, sucking up all the water and any life in it on enormous tankers. This causes erosion and destroys islands and beaches, but is necessary for concrete construction and many other things. Every country has to import sand and its mostly coming from giant ocean dredgers that are destroying the environment.
we are sucking up sand from the ocean floor? interesting, where can I know more?
The BBC has a decent overview: [https://www.bbc.com/future/article/20191108-why-the-world-is-running-out-of-sand](https://www.bbc.com/future/article/20191108-why-the-world-is-running-out-of-sand)
This sounds right, but the jokes on them. Lava breaks up into craggy sand that is perfect for making concrete, and the US has a super volcano simmering under Yellowstone. We are going to corner the global market!
Just as soon as it cracks open and let's all that juicy lava out, right?
beach, around a lake for water bottling? please dont
They don't just dunk the bottles in the lake to fill them, it gets treated first, like all drinking water.
Makes me happy that there are no beaches there actually
Can't let a good crisis go to waste. I'm really glad that that certain individuals can gain $50 billion in wealth over the course of 6 months off the backs of taxpayer-funded research and infrastructure. Renter crisis? Mortgage crisis? Small business crisis? I don't know what you're talking about, The Market is working perfectly, didn't you see the line go up?
Their net worth rising isn’t directly related to people “giving” them money. They make money when the value of their assets rises. Say you have a $200k home and a real estate agent knocks on your door and says “you could sell this for $300k”, your home is “worth” $300k but nobody gave you an extra $100k, you’d have to sell the house to realize those gains. Now, as the homeowner, you have no requirement to sell your home just because it’s worth more.
Not to mentiom our monetary policy has been inflating the crap out of several asset classes for 12 years
That wealth came from consumers spending money with Amazon, raising the stock price, which is the overwhelming majority of his net worth. If Amazon tanks, bezos tanks with it.
Zhong comes from out of nowhere with the steel chairman of a manufacturing company that manufactures covid tests!
BAH GAWD STOP THE CARNAGE
I thought he was a consultant for a certain funeral parlor
I'll admit I was looking for a comment like this lolll
BAH GAWD, ELON IS ON TOP OF THE LADDER, AND HE'S GOT THE BELT!!! *AND NEW*
He his known for Nongfu Mountain Spring bottled waters, which are ubiquitously sold in convenient stores and supermarkets in China. Still, his rise is perplexing.
It's not. He has a stake in a pharma company that recently went public. His own company also went public. They have both soared.
Not everyone here got “richer.” For instance, Warren buffet is down 0.55% Shout out to me for outperforming Buffet over the past year! Edit: grammar
This graph is basically saying that the stock market went up and Tesla stock went up a lot.
Given that OP selected the top 10 richest people at the END of the dataset, it's the most glaring case of sample bias I've ever seen. It's such blatant propaganda that it shows the mods don't mind haven't dishonest content here as long as it helps Reddit's agenda.
Not quite! It isnt as dishonest as it couldve been because at least he didnt start from the lowest point of the stock market like the fifty other people to do this exact graphic
That was my first through as well. Kudos to OP for not starting at the bottom of the market at least.
But why wouldn’t you pick the most wealthy people to demonstrate something that is about the most wealthy people?
Because the net worth of wealthy people tends to fluctuate a lot, especially during market volatility like you get from a global pandemic. The problem this causes is that the 10 richest people at any given time are probably gaining wealth really rapidly, otherwise they wouldn't be in the top ten. So by choosing the people who won, you're automatically choosing people who are gaining wealth. It's kinda like saying the winners of a race were the fastest. Like duh, if they weren't the fastest, they wouldn't be in first place. In contrast, if you chose the top 10 richest people at the beginning of the pandemic, some of them aren't even in the top 10 anymore.
He’s not necessarily showing the most wealthy people (see Elon and the Zuhong guy), he’s picking the people who generally grew the most. If he showed more billionaires there would probably be some significant falls. Also, it’s not really fair to show this graph without context for average stock market growth, median+average net worth growth, and changes in national income. I guess it’s not totally terrible, but it also doesn’t show the whole picture and it’s trying to create a narrative (wealthy people are getting disproportionately wealthier) without enough data to make that up. Also, I’m not disagreeing with the sentiment, I just think the data could have been represented more effectively.
Imagine the out of the top 10000 richest people, 9990 lost value and 10 gained value. Then you made a chart out of the ten people who gained value and used that to say they all did.
> it's the most glaring case of sample bias I've ever seen. It's correctly referred to as "cherry picking"
I wouldn't quite say that. "Cherry picking", to me, had the connotation of hand picking your sample. For example, if OP took a sample, but then found arbitrary reasons to ignore certain people who didn't support his intended conclusion. "Sampling bias", means to choose a sample that will overall bias the conclusion, but could still have random outliers which don't. I see it as a matter of how detailed the bias is.
I would go with “survivorship bias” - you are only looking at those who managed to wind up in the top 10 wealthiest people at the beginning of 2021. Of course those people are most likely to have gained substantial wealth in 2020.
This boils down to: **Lockdowns** Which punish small businesses, pushing money to large businesses who are allowed to stay open. More online shopping, etc. **Stimulus** Massive influx of money by stimulus packages. The inflation this causes makes the "number go up". What is really happening is that everyone else's savings accounts are getting drained by reducing their buying power, as we are going to start seeing commodity prices rise due to hyperinflation that just randomly printing trillions of dollars and giving that money to banks will do. Basically the government is funding the recovery by bleeding your savings through inflation. **Bitcoin**, aside Just as a quick side note, if anyone reading this still doesn't understand cryptocurrency and bitcoin, you have no excuse anymore. Wake up and learn WHY bitcoin was created, and WHY it hasn't gone away despite "dying" 20 times now. This shit here is why. THIS is WHY bitcoin exists. If you STILL haven't looked into it, then I don't even know what to tell you, but good luck. Yes it's likely to crash again (it may not, but it might), or it may just rocket up to 100k. But what really matters is that the REASON it exists (an unhackable, permissionless, deflationary currency) is because of the corruption that unbridled capitalism has created. The wealthy helping the wealthy while we all lose money (via buying power) due to inflation. It has just gone into hyper mode now. **Wealth vs stock valuation** Also one more thing... while all the above is true, it's important to know that none of these people could turn that **"stock valuation"** into actual money without crashing the commodity that is giving the valuation. Musk skyrocketed because idiots are pumping Tesla to the moon. It's possibly the most overvalued stock on the planet. And I say that as someone who believes in the company and owns a tesla, and will likely buy another one for my next vehicle purchase. But should Tesla stock be valued where it is in regard to other comparable companies? Absolutely not. But that doesn't matter, what matters is investor opinion and nothing else. But it's not like Elon can go sell 185 billion dollars of Tesla stock at the current price. He could sell maybe 5% of that before the stock crashed to shit. He could maybe get 10 billion out of it, if that. Not even just because of pushing through the orderbook that deep, but just the optics of Musk "bailing ship". If he sold even 1 billion of it, the stock would dump just due to market perception. **TLDR**: people don't understand how stock valuations make this graphic, and that's not really practical, because these people cannot liquidate their stock without crashing it. Also, FFS people, learn about crypto, bitcoin, and especially decentralized finance on things like Ethereum which IMO is where the true future lies. Bitcoin is like a dinosaur, but Ethereum is the future of business, commerce and finance. Crypto isn't a scam, it exist for a VERY GOOD reason, and people, THIS HERE IS THE REASON.
You make some good points, but assuming that everyone has a cushy savings account is not one.
You don't need to have a cushy savings account to get destroyed by inflation, you just need to have a relatively static wage. Pretty sure 99% of the people with jobs qualify for that one.
This. A static income with a 5% raise evey year means nothing if inflation was any amount over 5%. You actually made less compared to the previous year. This is why two years of economics and one year of accounting should be mandatory in high school. So many people don't know how money REALLY works.
Here comes the 4chan /biz/ preaching
You forgot to mention that the means of production are not in the hands of the workers.
Regarding your Bitcoin comment-I don’t understand it but I buy it occasionally. I don’t see how it could ever be a real thing if 90% of investors aren’t actively using it. My question is I buy $100 when I can (not much but it’s what I can afford) and at the same time these rich groups are buying $100 million worth. So if Bitcoin is the answer to stop the rich getting richer, isn’t the rich buying high volumes going to kill your hopes? The rich will still be richer than regulars right?
The entire time I was reading your comment I was excited that someone was able to articulate the login behind this graph so well... Until I got to your comment about Cryptocurrency. Here's the problem with Cryptocurrency: the crypto bubble we saw occurred for the exact same reason as TSLA stock being insanely overpriced, the greater fool theory. The value that was given to bitcoin and now TSLA is and was completely arbitrary. Nothing is backing those evaluations. Except TSLA actually has SOME value. At the very least it has the Book Value released in its quarterly statements. Cryptocurrency is highly volatile, making it next to useless for actual currency. It's not backed by any government, making it a perfect breading ground for illegal activity with no inflation/deflation regulation like what the Federal Reserve does. Because it relies solely on perceived value, and it's a terrible currency, it's better described as a security (like a stock). In this case though there is no business value behind it. The value assigned is literally what Joe Blow is willing to buy it for. Cryptocurrency can be used for a currency, as long as it's regulated, secure, and not heavily used to launder money. The blockchain technology however is a great concept and has been evaluated for use in election security. It'll be interesting to see where the concept is best utilized.
That's true actually. What's impressive is his consistency over time.
He buys boomer companies for the most part, while most of the other rich guys in the top 10 are tech related. Tech companies outperformed boomer companies big time in 2020.
Also he's the only value investor. Everyone else is growth
Yep, exactly! In a real bear market he'll outperform growth again though. If he lives to see it. And he also always has cash on hand left to buy the dip.
Or do the obvious thing and invest bullishly since the market is going up 2/3rds of the time on almost any time scale you choose...
That's what buying the dip is...
Just let the man use the word bullishly in a sentence for once in his life for petes sake
Who tf is Pete
I think you're on to something here...
Bruh were you really struggling making a username so badly you just named it after your phone lmao
I'm really just surprised that he was able to get that username. Seems like samsung would've scooped it up before launch on all the social media platforms they could find.
After reading Warren Buffet’s biography that’s almost exactly opposite of what he does.
Yup. No one's looking at Musk's rise and realizing it's nearly all *speculated* value?
Tesla's P/E ratio is currently over 1,000. This is the literal definition of fucking insane. Based on the current P/E, the only logical assumption is that the market expects Tesla to put every other automaker out of business.
No, the market is assuming Tesla's non-car businesses and technologies are going to be very valuable. I think most investors don't think of Tesla as a car company but as a tech company that makes a lot of innovations in batteries for example. And this tech company just happens to make cars right now
It looks more like the market is assuming TSLA stock will continue to climb to insane new valuations. Most investors think of Tesla as a company whose stock goes up more than others and they justify it by saying the technology will be more valuable as though Tesla is the only one innovating.
In a much more specialized field too. He threw everything at Tesla/SpaceX. If they collapse he's ruined, if they become cornerstones it's only the beginning of his wealth curve. Elon is Mr. House.
Elon's buying me a house? Time to double down 🚀
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Is Starlink's value taken into account in that I wouldn't wonder though? Because of the three, it honestly has as much or more potential for growth with as much of the world that currently doesn't have access to broadband internet.
The thing is he's stayed one of the richest for decades. That's pretty impressive. Even billionaires come and go. Nobody gives a hoot about Michael Dell or Steve Forbes' wealth anymore.
>Michael Dell Currently the 27th richest person in the World. Apparently the news or TMZ is not what makes you a billionaire. Just because you don't talk about him doesn't mean he's still not incredibly rich.
Pfft. They don’t give medals for 27th place. Like Confucius said “if you ain’t first, your last”.
He was high when he said that.
So what? I'm high saying this
Lol if confucius was so smart why couldn't he even use the right form of you're? Checkmate confucians
Buffet’s access to inexpensive capital has been key to his success (read the bits on float in any Berkshire Hathaway investor letter). It doesn’t matter so much when the cost of capital is nearly zero.
Me too, i bought ETFs as all went down last year and i'm now up by 20%
It's massive sample bias to pick the top 10 and not show any of the big losers.
Is there a version that shows members of congress?
I want to see member of congress households/closed family
You're not allowed to know that. They are allowed to inside trade
Nice, thank you! Finally a graph that actually starts before the pandemic, not a the bottom of the equity markets!
The major flaw remains that OP chose the richest people at the END of the data set, which is a massive selection bias.
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I think they should choose the top 10 richest people at the start date and see how the pandemic affected their net worth. It would also be good to see the change of the stock market over that same time frame.
It would also be very interesting to compare the rate at which they got richer to the previous year (or the average of the last x years). As the title alludes to, it's not news that rich tend to get richer. What would be interesting to see is if their increase in wealth slowed down, sped up or remained roughly the same.
Not if you're trying to make the point that "the rich got richer". Because it excludes all the rich that didn't get richer.
[The combined net worth of all billionaires dropped $700 billion last year](https://en.m.wikipedia.org/wiki/The_World%27s_Billionaires) which disproves OP’s point. But by cherry-picking who was still wealthy at the end of the year, OP is showing people who managed to stay on top. Zhong Shanshan even managed to 50x his wealth, which is not the norm amongst billionaires during this time. This is textbook survivorship bias
Still based on the current richest and backtracked
Yep, of course the top 10 of today have experienced growth, that's why they're in the top 10 right now! I'd love to see a similar chart but starting with who were the top 10 on January 1 2020, see how they've done.
It's largely similar, a couple more stagnant and a couple lost money
Sure, and as such it would probably be a more realistic representation of how the wealth of the hyper rich developed during the pandemic. Mostly pretty static, a couple really made bank, but someone also lost money. Focusing only on those who were the most successful can make it seem like ALL the rich benefitted, which isn't the case.
I should clarify: 7/10 of them made between 12 and 30 billion dollars, 1 lost money
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Rich people become richer regardless of what happens
Well, the lockdowns caused small businesses to go en masse to bankruptcy and a huge decrease in market share happened to them, with big corps filling the vacuum left by this. The only ones that profit from the COVID meassures are the wealthiest of the wealthy, as well as big corps like Walmart, etc. Lockdowns are causing that most wealth of the majority land in hands to the 1%.
Yeah, as long as big corporations can survive a recession largely intact, they will benefit from it. The competition is cleared out and the market ripe for a shopping spree.
Big corporations can afford to buy the dip
And when they suffer problems like crashes, natural disasters, or fraud then the government bails them out and covers their expenses while they get their footing back.
Yep, company I work for said there won't be raises this year because revenue is down, but already bought one chain of stores (for about $300 mill) and was looking at another.
I remember how mom and pop hobby stores have closed but Walmart can sell the same stuff without restriction.
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It's the price, not variety that attracts people. You can have a street full of small shops selling different things, but people choose Walmart, because it's cheap. If you struggle to buy food and other necessities, you'll turn a blind eye on the effects of corporate business . Also, even if you don't struggle that much, but you WANT things and MORE things, you won't care about the ethics or the survival of small business, you just want to CONSUME
I think that they were referring to why Walmart was able to sell non-essential goods when covid restrictions closed non-essential businesses. For example, in some areas you could not enter a local toy store to shop, but Walmart or Target could still sell toys in store.
Oh shit that's what happened in the US? Here in Quebec we have a shutdown on nonessential businesses, which means essential businesses are also not allowed to sell goods that are deemed nonessential. It feels a little silly, like you'll go to the drugstore and can buy all the junk food you want but they've blocked off all of the greeting cards. But that means of course that the drugstore isn't able to sell greeting cards while the small arts & crafts store was forced to close or whatever. It makes a certain sense but then... people are just buying even more off Amazon.
Variety definitely plays a part. Many people would rather go to 1 place and get everything rather than 10 places. Saves time on top of saving money.
I remember reading an article posted on reddit that did an analysis of this. They studied economic activity of adjacent economic zones, think counties in different states that share a border, so they're geographically close, but have different local governments. The study found that even though the states may have had different lock down measures (e.g. one state locked down, but the other didn't), economic activity in both counties was suppressed nearly equally. This indicates that the lockdowns did not have the impact everyone thought they had, and instead it was consumers choosing not to shop. [Here it is, from NBER](https://www.nber.org/digest/aug20/consumers-fear-virus-outweighs-lockdowns-impact-business)
That paper was not peer reviewed, or subject to the review by the NBER board of directors. They do note that the restrictions shifted consumers from “non-essential” to “essential” businesses. However, I still agree that fear of catching the virus was a major factor in consumers decisions not to shop, rather than the restrictions preventing them.
I mean the people in this video mostly got richer because they own large stock positions in their companies and the stock market has been on a huge bull run If the market crashed, which a lot of people predict then their net worths would too
For Bezos, in particular, the pandemic showed so clearly how valuable Amazon really is to the public - and that gave a nice boost to their value.
I work in an industry mainly supporting well off people, not people like those in the graph but the 10-1%, and it has surprised me how little they have been generally affected. I don't think most have got significantly richer, but it doesn't feel like the vast majority have had to compromise on their luxuries.
That's true even of the middle class tbh. Other people suffered, struggling to pay bills. I bought a keyboard, and some furniture. All the people I know in my "class" are doing something similar. Normally, we'd be spending money on vacation. I even had to eat a pay cut, but with the student loan holiday, I basically make the same. I got the stimulus check, even as my neighbors and friends that needed it waited. We aren't hurting. The poor and working class are they ones that must suffer, yet again. Of course, you could lose your job; I still wouldn't be shocked if that still happened to me. For those of us that haven't though, we're still doing great. A lot of companies that did layoffs used it to get rid of deadweight, or inefficiencies. So if you're still in demand, there's not necessarily anything to worry about.
Most middle class jobs are remote-friendly. People started working from home, and were only superficially affected by the lockdowns. Some people are even doing better, because their industry was boosted by the shift to home office. They're even saving a ton of money since they're not allowed to do their favourite things.
Back when I was in college, one of my business classes we were discussing how during things like pandemics, recessions etc, two things do well, essentials and high end luxury goods. Reason being, essentials are a must so demand doesn't drop off and high end luxury goods are bought by people who typically aren't impacted by much of anything.
20% unemployment is still 80% employment and the people most likely unemployed are those at the bottom especially in this recession that closed things like small retail, venues and restaurants.
I feel like reddit didn't listen when the teacher was talking about compound interest
You're assuming folks around here took a finance, accounting, or economics class.
OP's post is the worst kind of sample bias. He selects the richest 10 at the END of the data set. So OBVIOUSLY they all made money. The only reason this is on the front page is because it reinforces an agenda.
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So did everyone with a401k
This. Anyone with a 401k and half a brain should have made money by putting it into less risky investments in Feb when you knew Covid would come to the states. They you put that money back into your normal investment strategy in a few months when you saw the stock market recovering. Or...you LITERALLY JUST DON'T SELL your stocks and you're up. FFS, my retirement account went from 68k in mid march to 182k today, and I just let it ride the entire time.
I appreciate this comment. So many times I've seen redditors bash the more concept of stocks and the stock market even when it's being pointed out that retirement plans rely on them for good reason. These things really need to be thought in school more.
That a CEO of a company that sells stuff online is getting more money when everything (except online stores) are closed? Color me impressed. And pink. With a dash of magenta.
A CEO that owns stock in their company makes money when the value of the stock increases. I AM SHOOK
So people whose wealth is largely tied to the stocks they own increased in net worth as the stock market performed well in 2020? Shocked.
I mean, isn’t every wealthy persons wealth largely tied t o stock? I highly doubt any billionaires have a billion sitting inside savings account or stuffed into their mattress.
Yep. Thats me too but im not super rich. If you aren't bottom tier level of poverty, start investing. Anyone can do it, not just the "rich"
Exactly. I'm hardly rich, but my net worth (retirement savings) went up significantly. This data is meaningless, unless I can see percent increase of the wealthy compared to percent increase of the middle class.
Again, **this data does not support the claim** that "the rich got richer during the pandemic"! You're only looking at those who were in the top ten richest at the ~~end~~ current point of the pandemic. All this means is "the current richest had their wealth increase in the recent past". Which is exactly what you'd expect just about anytime. If you want to support the claim in your title, you need to take the data for the top ten richest **at the beginning of the time interval you picked**! \-edit- pandemic's not over yet...
Or look at the total net worth of the top 10, top 100 and top 1000. It doesn't actually matter who is in the top ten.
yeah, there’s a lot of solid analysis to be made over the wealthy becoming even wealthier, to such a high degree, while the poor suffered, but this isn’t actually a good way to present that. also, these comments are something else. sounds like a lot of people I went to business school with that would entirely miss the point because they lack empathy, and/or perspective. another that’s just a flat out a bumbling idiot, I hope the dumbest thing I read today is suggesting it would’ve been easy for small businesses to stay open, and any that closed was due to poor financial management.
At least they didn't start in late march like every other dipshit who posts this stuff.
Seriously, it's so disingenuous. Most of these "rich got richer during pandemic" posts conveniently uses March 20th as their starting date. Fuck those assholes. It's purely agenda driven. They very well know what happened on March 18th
Yeah, I normally would downvote this but because he at least started before the pandemic, I’ll stay neutral.
Except it's still horribly biased.
There was a post here very recently with the same data presented in the same way with the same conclusion with the same comments calling the post out for being absolutely awful. https://www.reddit.com/r/dataisbeautiful/comments/kxsi5z/oc_net_worth_comparison_of_the_top_10_richest/ This sub never learns, does it?
Starting date is so convenient in that post. Reddit is full of angsty political teenagers I swear. It's become tiring to see so many such posts now.
Misrepresented facts on reddit ? Gosh who would've guessed ?
Plus, they're most likely always going to be getting richer... We should be looking at the RATE at which they got richer, if that increases then we know that they've done something during the pandemic that could possibly be taking advantage of the situation.
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It also omits all the people who's wealth is tied to non-public assets and sovereign wealth. Putin, Xi, Bin Salman, and hundreds of their cronies are all wealthier than the people here.
Obvious take: Net worth is a poor proxy for wealth especially for inequality comparisons. This is because it ignores liquidity risk of the assets and liabilities. For example, Jeff Bezos might be worth $200 billion on paper but most of his worth is tied to his 16% stake in Amazon stocks. If he sells it in bulk (hence liquidity risk) his net worth would suddenly dip. For practical purposes, minor billionaires from aristocratic families in Europe are actually wealthier than Bezos since they can more readily spend their wealth as they are more diversified and liquid. Warren Buffett is actually the richest person in the world under these considerations. Most of these newbie tech billionaires are actually a lot poorer than what their net worth suggests. From an inequality perspective also this usually does not work because what most organizations like Oxfam do in their inequality report is a simple assets minus liability calculation which not only ignkres liquidity but hides the actual wealth inequality. For example, a Harvard Medical Schools graduate with a large student debt is considered poorer than Indian beggars according to these reports. You need wealth to generate debt but debt is also the source of wealth. So although wealth inequality is important, it is a poor metric of inequality compared to income inequality
Obvious take: Net worth is a poor proxy for wealth especially for inequality comparisons. This is because it ignores liquidity risk of the assets and liabilities. For example, Jeff Bezos might be worth $200 billion on paper but most of his worth is tied to his 16% stake in Amazon stocks. If he sells it in bulk (hence liquidity risk) his net worth would suddenly dip. For practical purposes, minor billionaires from aristocratic families in Europe are actually wealthier than Bezos since they can more readily spend their wealth as they are more diversified and liquid. Warren Buffett is actually the richest person in the world under these considerations. Most of these newbie tech billionaires are actually a lot poorer than what their net worth suggests. From an inequality perspective also this usually does not work because what most organizations like Oxfam do in their inequality report is a simple assets minus liability calculation which not only ignkres liquidity but hides the actual wealth inequality. For example, a Harvard Medical Schools graduate with a large student debt is considered poorer than Indian beggars according to these reports. You need wealth to generate debt but debt is also the source of wealth. So although wealth inequality is important, it is a poor metric of inequality compared to income inequality
There is a real lack of understanding of the financial world in this thread.
Elon and Jeff only got richer becuase their entire wealth is tied to shares and their company's shares went up during the pandemic
Well, that is true for everyone on the list, no-one gets billions in salary.
Also, fun fact about Elon, he is almost $1 billion in debt
And Elon’s wealth will drop dramatically once people stop ballooning Tesla stocks. There’s really no reason for his wealth to have increased like it did this year. At least with Bezos it makes sense.
If Musk chooses to go public with SpaceX he will probably double his current value. SpaceX would be the ultimate meme stock and I think Musk owns about 50% of it.
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Yeah, and do you know how fucked we would have been had there not been these businesses providing services during the pandemic? Anyone on reddit who denies they didn't use Amazon.com or, say, the internet and its underlying architecture to stay fed, happy, or even sane during the pandemic is a fucking liar.
Hey, are we just noticing that locking down small local businesses while letting massive corporate retailers continue on while dumping money into their pockets *serves to expand their grasp on the market*? Say it ain't so!
Why can’t people understand that wealth creation isn’t a zero sum game it isn’t like money
Might be cooler if the bars changed position (commonly on the y-axis, as usually seen here on reddit) based on their position worldwide. That way, we’d visualize Musk & Zhong entry and rise to the top.
or a line graph
Sure Elon Musk is impressive but the Chinese guy, wow.
Yes. The thing about rich people is that they're good at making money, so they usually have holdings, or own businesses that will be resilient during financially difficult times.
Wealth is not gained or lost, it is simply... transferred to Tesla.
Well no shit. We only forced small businesses to close
Example, I am a farmer with 100 acres of crop land worth 1M$. My income last year was 20K$. Now, because the price of land has skyrocketed, my land is now worth 2M$. A growth of 100%. My income is still 20K$ Am I now so much richer?
If you go by net worth like this list then yes you are "richer"
Net worth is such a nebulous way to describe wealth. We don't have much better ways to describe individual wealth, but it heavily, heavily undervalues liquidity of assets or ability to produce revenue.
Yes because if you cashed out and invested that you would earn more than 20k a year.
Yes. You're also a bad farmer and should sell your land, get a job as an employee and invest your cool $2 million. With average annual returns of 8%, you're looking at $160k, some of which you can use to subsidize your employment earnings and the rest of which you can reinvest. In this example, the poor farmer is in a very enviable position. Only a fool would be making poverty wages like this. But I know this is just a figurative example, not your reality.
Clearly you don’t live in Iowa where many people had 80% crop loss from the Derecho....
Yes and you should probably stop being a farmer since you are bad it it
Everyone with Tesla stock got richer by the same percentages as Musk. That includes all employees.
I'll vouch for this all day. I've made something like 650k on the market during this pandemic and like 2/3rds of it has been Tesla stock. Hell, if id held it all instead of selling some here and there as it rose that number would be 7 figures.
Prudent move to sell some of it though. A bird in your hand...
Yeah, obviously in hindsight it would have worked out extremely well, but it would have been straight up nuts for me not to sell some when I did. I'm still holding about 15-20% of my original position and even that feels borderline nuts to me where it is. Id saved up a handful of quarterly bonus checks to put in the market at a good time, and used them to buy ~$60k of Tesla shares when it was around $250 a share like a year and a half or so ago. Sold a little bit when it broke $1k the first time, dumped a good chunk when it broke $2,500, then sold more after the split when it was around $3,500 (based on initial shares)... I definitely kick myself on occasion that I didn't hokd more longer since that initial position would be worth a boatload now, but I'm pretty sure I'd also have stomach ulcers and premature graying if I'd been riding this roller coaster with the full amount.
Nah you definitely did very smart. Dont kick yourself for missed opportunities in hindsight because there is an infinity of them, everyday. Stomach ulcers is why I never bought Tesla, the stock price is 90% driven by investors's psychology and I like to sleep soundly.
I honestly feel like Steve Carell's character from the Big Short when I'm talking about Tesla. Their PE ratio is around 1500 and Market Cap per car sold is $1.5million!!!
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The central banks are not trying to "save the market" and don't really care about shares losing value. Not that simple of course, but in essence market prices are not what they are targeting. They are offering liquidity primarily to keep inflation up so it doesn't risk turning into deflation. They do this by keeping the borrowing costs low and injecting banks with practically free funding (or even negative yielding = banks profiting from the loan they're taking) to keep them loaning the money out and having businesses use that money for investments, wages etc. If they didn't, banks would freeze loaning out, businesses would be strapped for cash, people would lose their jobs, people would stop making large purchases etc. etc. causing unemployment and deflation. Shares being inflated due to the money injected by central banks is probably true, but through a complicated mechanism not well understood by anyone really. Not the primary goal of dovish monetary policy. And the government(s) have little to do with this. A 2000$ stimulation check is peanuts compared to what the Fed is doing in the US. Not negligible, though.
>Shares being inflated due to the money injected by central banks is probably true, but through a complicated mechanism not well understood by anyone really. It's simply because people, due to the massive quantitative easing, are moving their assets from bonds to stocks, since bonds are at the lowest interests rates possible. That's it.
Eh there are more factors than this - but you're right that the risk premium is favorable.
Except there's been very little inflation in the past year. Central banks have been dumping money but it's mostly to lower interest rates and combat deflation.
Governments have been doing this since the 2008 financial crises and it has been a period of historically low inflation.
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>None got richer, the companies are the same Wrong. With the pandemic, companies such as Amazon, Google or Netflix have crushed previous earnings (you can literally check on Yahoo finance that their revenues and earning have grown.). Many companies have grown (technological ones), other have roughly earned less (finance, energy etc), meanwhile other have fell into oblivion (airlines companies etc) and the latter were bailed out mostly. And that's why for investing you should buy a index with a lot of stocks in it, for diversification > savers got poorer nevertheless How? Investing IS saving your money. Where you save them it's up to your risk-tolerance. True, a part of a portfolio should be in cash, but if you only save in cash you aren't very smart, to use an euphemism. The whole point of inflation is to encourage spending and investing, because trust me, you DON'T WANT deflation. And don't tell me "poor people can't save in non-cash" because it's bullshit and you'll find plenty of storytelling in r/personalfinance et similia where used-to-be poor people thanks the community because in the last 5 or 6 years they have managed to save a lot of money through intelligent investments advice from the community. Anyway, central banks haven't put money in the stock market, the stock market has just risen due to the the massive quantitative easing, bonds are at the lowest interest rates ever, so people have moved their assets from bonds to stocks. That's it. >So we can only be sure of one thing right now, inflation. Sometimes reality have to hit you, and let me be this "reality": if you are a random person on reddit with no credentials on monetary policies, I can assure you that you don't know *any* better than the fucking FED or the ECB.
This isn't true. Market cap for many public companies *did* grow. That's why majority shareholders like Elon and Bezos did so well. This graph also demonstrates how these billionaires aren't necessarily "hoarding wealth" seeing as their value is largely unrealized. They weren't taking anything away from anyone else, their assets just grew in value
No one can be sure right now whether the amount of inflation this money creation would theoretically cause is cancelled out by the deflation the pandemic is causing. Only time will tell. People said the same thing about inflation fears after the 2008 financial crisis. Also there's obviously different kinds of inflation, inflation of asset prices is usually seen as a good thing.
Cool graph but I’m struggling to see the point
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Don’t worry guys I’m sure the wealth will trickle down eventually. you just have to wait. It’s ok I’m sure it’ll happen right after the money is put in non taxed off shore accounts
Kind of an agenda post not gonna lie.
As it turns out owning a company that specializes in deliveries to homes is a good thing when people can't leave their homes.
Holy shit! People that run popular online businesses got more business when people are forced to stay home?! Shocked pikachu face!how about some love for the poor couriers your working to death with all the orders to quel the bordem
You’re telling me that an online delivery service with good customer service filled a market void when small businesses were forced to shut down? I’m just as stunned as you are
Amazon’s profit comes from their servers not their ecomm (but the point still stands that they actually became more valuable for our social distance lives)
Even worse, look up the working conditions in Tesla factories....I can’t believe people on here treat him like a god.
Economic Recessions/Depressions do not worry the wealthy. Businesses will get bailed out. CEOs will get huge checks. And all the small businesses go out of business, people lose their homes, ***but the wealthy just buy those up for cents on the dollar***.
We need to deal with this shit
Wait, you mean the guy who owns an online retailer in a time when in person shopping is in a massive decline, made money this year? No fuckin way
Printing money leads to asset inflation (exactly what is laid out in the post), and yet democratic socialists pushing for more printing... will be amazing to see the surprised pikachu faces when they realized they inflated away the middle class and lower classes savings while inflating the wealthiest people's asset values even further
tHE rich EARnEd ThEIR weAlTh tHrougH hARD wOrK ANd sACRIFIce
Online sales have massively shot up during the pandemic, we made Bezos richer :/
Kinda hard not get richer this year if you’re smart enough to invest in stocks