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How the 0.001% invest

economist.com

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Re: How the 0.001% invest

#181

Post by diminoten »

SeanAppleby wrote: post #170
diminoten wrote: post #144

Earlier quoted context omitted.

That's not at all what he said, and nothing you've said answers my question -- why is Jeff Bezos in particular "very very important"?

Jeff Bezos isn't necessarily more important than other people that also invest in impactful things, but he is the wealthiest person in the world and invests in speculative things that impact how the world works, which is kind of a big deal. Also, the parent comment did say that the projects are important, not Jeff Bezos. I was just talking about the interaction of wealthy investors and their side projects, which is w…

> you're not interested in the investments of someone who buys

Someone is a person, not multiple projects.

And no, his specific investment on any individual project isn't that particularly interesting.

Re: How the 0.001% invest

#182

Post by red_phone »

Gustomaximus wrote: post #79
mruts wrote: post #62

Earlier quoted context omitted.

I've seen the portfolio's of dozens of family offices (I worked at a portfolio analytics company so I had free reign to snoop around), and none of the offices seemed competent. The returns were terrible and the portfolio construction laughable. Instead of striving for out performance, the funds just catered to the whims and idiosyncrasies of the family. Also, many of these funds were too small to make sense, AUMs fro…

A friend of mine who manages ultra wealth people said most people who turn up don't say "How much can you make me" but say "Can you make sure I'm never poor". It's often about preservation of wealth more than gains for these people. That said I've discussed some returns they make and it's incredible. I don't want to say what I recall, as it was a couple years back and it sounds like an exaggeration. They said this is…

As one of our clients at the private bank where I used to work put it, “Don’t try to make me rich, I’m already rich.”

Re: How the 0.001% invest

#183

Post by captain_chester »

mruts wrote: post #62
potatofarmer45 wrote: post #42

I've worked for a family office in Hong Kong. What was really telling for me was how the rate of return KPI was measured. We were not benchmarked against the S&P 500, or any index. We were measured directly against the fund of another frenemy family. So long as the fund outperformed the other family, all was good. It's crazy because you could be underperforming treasury bonds, and still be good because the other offi…

I've seen the portfolio's of dozens of family offices (I worked at a portfolio analytics company so I had free reign to snoop around), and none of the offices seemed competent. The returns were terrible and the portfolio construction laughable. Instead of striving for out performance, the funds just catered to the whims and idiosyncrasies of the family. Also, many of these funds were too small to make sense, AUMs fro…

If you were smart you’d delete this comment and possibly your account. It’s not worth disclosing personal information about a client you worked on, anywhere online. Seems like an unnecessary risk, regardless of how trivial you think it was.

Re: How the 0.001% invest

#184

Post by philwelch »

thaumasiotes wrote: post #158
barrow-rider wrote: post #103

Earlier quoted context omitted.

Depends on risk tolerance and how flashy they want to be. Donald Trump, if his public finances are to be believed, would have roughly the same net worth had he just invested the money his dad gave him in mutual funds. Instead he managed to create a series of failing companies and questionable ties... but managed to live the high life and stamp his name on bloody everything.

> Donald Trump, if his public finances are to be believed, would have roughly the same net worth had he just invested the money his dad gave him in mutual funds. There was a factoid going around years ago that said Donald Trump's net worth was equal to the value of his inheritance if it had been invested in an index fund. But note that under that hypothetical, he never would have spent any of it. Do you think the his…

Trump's net worth is actually measurably lower than what his inheritance would have been worth if it were invested in index funds.

Also, while some of Trump's lavish expenses are pretty much just lavish expenses (business jets and the like), some of his superficially ridiculous personal expenses, like gold-plating half of his entire penthouse apartment in Trump Tower[1], don't necessarily hurt his net worth that much because he could always sell the tower with the tacky gold-plated penthouse to someone else who could extract some value by removing the tacky gold plating and having two valuable assets left over: (a) a penthouse apartment in a Manhattan high-rise and (b) gold.

Most of Trump's losses came from a variety of failed business ventures, which isn't necessarily a huge criticism. Some people just like doing a bunch of business ventures and they don't all have to succeed to be a net positive. It's just that if Donald Trump spent the same lavish amounts of money and invested less money in his own ventures and more money in index funds, he would be richer today.

Of course, in this hypothetical scenario, would he become a cartoonish real-life personification of American capitalism, host a reality TV show, get a lot of Twitter followers, and develop the dedicated fanbase necessary to eventually be elected President? Probably not.

[1] I'm not entirely making this up, though my only source is a foggy memory of the first season of The Apprentice, when Donald Trump invites the guests to tour his penthouse apartment.

Re: How the 0.001% invest

#185

Post by gretch »

jandrese wrote: post #154
dgudkov wrote: post #139

Earlier quoted context omitted.

>simply having wealth begets more wealth It's not a 100% rule. Lots of wealth has been lost due to wrong investment. Many rich people lose their fortunes.

> Many rich people lose their fortunes. Up to a point. The ultra-rich have so much money now that it would take a monumental disaster for them to become poor again. IIRC only one person in history has ever stopped being a billionaire: J. K. Rowling, and that was due to enormous philanthropic giving. Mere millionaires come and go, but once you're talking hundreds of millions the positive feedback loop of capital makes…

My hypothesis of the world is that someone must have luck AND skill to become 100M+ wealthy and I think people commonly create a false dichotomy of luck OR skill.

Maybe the reason we never see hundred millionaires lose everything is because they have the necessary skill to manage the money well.

I don't think it would be correct to attribute causation based on the information we have available.

Re: How the 0.001% invest

#186

Post by corporateguy6 »

barrow-rider wrote: post #103
whitepoplar wrote: post #68

Earlier quoted context omitted.

My guess is that most UHNWIs would do better to simply park their money in Vanguard index funds and call it a day.

Depends on risk tolerance and how flashy they want to be. Donald Trump, if his public finances are to be believed, would have roughly the same net worth had he just invested the money his dad gave him in mutual funds. Instead he managed to create a series of failing companies and questionable ties... but managed to live the high life and stamp his name on bloody everything.

This is propaganda. High net worth individuals never put all of their money in the market like that. Stop listening to cnn

Re: How the 0.001% invest

#187

Post by SeanAppleby »

diminoten wrote: post #181
SeanAppleby wrote: post #170

Earlier quoted context omitted.

Jeff Bezos isn't necessarily more important than other people that also invest in impactful things, but he is the wealthiest person in the world and invests in speculative things that impact how the world works, which is kind of a big deal. Also, the parent comment did say that the projects are important, not Jeff Bezos. I was just talking about the interaction of wealthy investors and their side projects, which is w…

> you're not interested in the investments of someone who buys Some one is a person, not multiple projects. And no, his specific investment on any individual project isn't that particularly interesting.

Your quote very clearly says "in the investments of"

Investments is clearly and completely unambiguously the subject of "interested in" that sentence.

Re: How the 0.001% invest

#188

Post by diminoten »

SeanAppleby wrote: post #187
diminoten wrote: post #181

Earlier quoted context omitted.

> you're not interested in the investments of someone who buys Some one is a person, not multiple projects. And no, his specific investment on any individual project isn't that particularly interesting.

Your quote very clearly says "in the investments of" Investments is clearly and completely unambiguously the subject of "interested in" that sentence.

"of someone" is the qualifier, which is unambiguously specific to the person.

Re: How the 0.001% invest

#189

Post by jandrese »

gretch wrote: post #185
jandrese wrote: post #154

Earlier quoted context omitted.

> Many rich people lose their fortunes. Up to a point. The ultra-rich have so much money now that it would take a monumental disaster for them to become poor again. IIRC only one person in history has ever stopped being a billionaire: J. K. Rowling, and that was due to enormous philanthropic giving. Mere millionaires come and go, but once you're talking hundreds of millions the positive feedback loop of capital makes…

My hypothesis of the world is that someone must have luck AND skill to become 100M+ wealthy and I think people commonly create a false dichotomy of luck OR skill. Maybe the reason we never see hundred millionaires lose everything is because they have the necessary skill to manage the money well. I don't think it would be correct to attribute causation based on the information we have available.

This article suggests that their investment strategies may be suboptimal in many cases.

Some of it may be the forced diversification you get with this much money. It's hard or impossible to dump $100M into a single stock unless you are an Elon Musk type and own the company. So if you make a bad bet and lose a million bucks, well, that's just 1% of your portfolio and the rest will make up for it. Of course you're a regular millionaire and lose a million bucks on a bad investment you are going to the poorhouse.

You could dump $100M into GE without triggering anti hostile takeover actions, but they're also not likely to go bankrupt anytime soon.

Maybe some hundred millionaires could have had their portfolio completely tied up in Lehman Brothers a few years ago, but even then you probably would have gotten a fair bit of money back.

But this goes back to my point that as long as you aren't pants on head with your investments you are beyond the point where it's possible to ever be poor again.

Re: How the 0.001% invest

#190

Post by woolvalley »

syn0byte wrote: post #173
ABCLAW wrote: post #164

Earlier quoted context omitted.

>One of the exceptions was [Person]'s family office, which managed a shit-ton of money and had some good people who actually knew something about portfolio construction. I'm not sure what type of professional you are, but you may be in breach of your responsibilities by disclosing the specifics listed above. I know this message might seem silly, but I'd hate if you got in trouble for complimenting the guy's affairs.…

I'd love to see Brin's lawyers explain to the court how they found the real world contact info of a random user on HN.

Subpoena HN, get IP, Subpoena ISP, get customer info, Subpoena customer, etc.
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