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Jeff Bezos's Net Worth Just Broke $100B

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Re: Jeff Bezos's Net Worth Just Broke $100B

#91
post #17

Earlier quoted context omitted.

This is not a great comparison: net worth vs market value of goods over time. E.g. what if GDP was measured in decades instead of years?

It's a perfectly good comparison in fact. Let me show you how that works. Did you know, the Stratolaunch has a wingspan wider than the length of a US football field? The equivalent reply would be: geez, that's a terrible comparison, because the Stratolaunch is not a large plot of ground, they're entirely different things! GDP is obviously not inherently measured in years. GDP has no set measurement period of time. GD…

Eh I think the intuition the parent is trying to get at is that GDP is really in some sense a measure of flow, that is it is a measure of quickly money is exchanging hands weighted by how much money is being exchanged. Hence it feels more akin to comparing something like joules to watts rather than comparing the same dimension of two non-like things.

Put another way, yes Jeff Bezos could more than double the GDP of the country in question if he donated his entire net worth as someone else's income. But so could someone with a trivial sum of money (say a single U.S. dollar) by creating a series of dummy transactions with someone else where they constantly exchange the same sum of money back and forth for dummy "services." Yet at some level it seems weird to compare Jeff Bezos with this hypothetical person.

That being said, that's just an intuition. GDP is actually calculated as a dollar amount not a rate. As such I think there's still some worthwhile explanatory value in using GDP as a measure against static monetary amounts in the same way that you can say "this swimming pool has the same amount of water as the amount of water that flows over Niagara Falls in a day" (to the best of my knowledge such a large pool does not exist).

Re: Jeff Bezos's Net Worth Just Broke $100B

#92
post #40

AMZN, the stock, is trading at a P.E. Ratio of nearly 300. http://finance.google.com/finance?q=NASDAQ%3AAMZN Serious question: Considering that it nearly doubled over the past year, is it already too late to buy Amazon stock? Or not? What's the upside?

I personally believe in Amazon, but their metrics are indeed obscene. I don't own any stock, and won't buy any until it pulls back at least 10%, and even then I'd be analyzing why it fell the 10%. The fact is it is rarely too late to invest in a company if you do it prudently. The difference is Amazon being your portfolio - and being part of your portfolio. Given its obscene metrics you shouldn't allocate a large per…

if 1 and 2? or 1 or 2?

Re: Jeff Bezos's Net Worth Just Broke $100B

#95
post #72

Interesting talk from Bernie Sanders about wealth inequality and the state of the economy: https://www.youtube.com/watch?v=ao7iC9b5Mk0&feature=youtu.be I know it's "political" but so is an individual having a net worth of $100 billion. It is well worth the watch unless, of course, you're a billionaire snowflake and don't like the reality that there are 500,000 homeless people and 45 million people living under the po…

Jeff Bezos having $100bn is no more political than me having $20. Where you draw the line is completely arbitrary. Bezos didn't acquire his fortune by stealing from people. He made it by providing goods at a lower cost than his competitors. Which means everyone that helped make Bezos wealthy are wealthier as a result of that interaction.

Re: Jeff Bezos's Net Worth Just Broke $100B

#96
post #55

Earlier quoted context omitted.

if you're being sarcastic, I am sure he doesn't care. "Humanity" is complicated...maybe he'll make up for all with one invention on his space venture. He did save people a lot of money, but then he did also cause many stores to go kaput. So, how do you judge?

The sarcasm was not directed at him, but at us, and our lack of ability to come up with an economic system that can properly evaluate what somebody is worth. E.g. We have a legal system that decides when somebody is right or wrong, and it mostly matches with what people feel is right or wrong. Why can't we have a similar system that decides what somebody is worth?

> our lack of ability to come up with an economic system that can properly evaluate what somebody is worth.

Uhh, how so? Jeff Bezos's assets are worth what people are willing to pay for it. That's the definition of value.

Re: Jeff Bezos's Net Worth Just Broke $100B

#97

AMZN, the stock, is trading at a P.E. Ratio of nearly 300. http://finance.google.com/finance?q=NASDAQ%3AAMZN Serious question: Considering that it nearly doubled over the past year, is it already too late to buy Amazon stock? Or not? What's the upside?

Asking whether it's too late to buy I think makes no sense... if it were, immediately market forces would drive up the price. If it were too soon, immediately market forces would sell. You can ask anyone, any individual, of course and they'll have a particular answer which will differ. But I wouldn't be quick to trust a particular answer over the answer of the market (which IS the stock price), unless the particular…

The mostly efficient market. You can get far picking stocks at random, but that doesn't mean it's better than having some idea about what you're doing. But for the most part it's about risk, not price. Price is usually about right, it's what you can afford to risk. I think Amazon's price went up because investors think they're about to battle Walmart. Wouldn't hurt to put a little in on both those companies.

Re: Jeff Bezos's Net Worth Just Broke $100B

#98

Earlier quoted context omitted.

P/E is a very meaningful metric. It's not that Amazon has infrastructure that matters, it's that they are reinvesting their earnings at a higher rate than other companies. If they returned capital to investors because they didn't have enough potential projects, then the investors would need to decide how to reinvest it. Your comment about reflecting the infrastructure in valuation would lean toward looking at Price/B…

I generally prefer free cash flow yield (fcf / dollar invested), although both PE and FCF can be fucked with depending on how certain expenses are classified. That being said, if I had to choose one of the two, I would go with FCF yield every time.

I agree, I should have mentioned free cash flow. Of course the real answer is to look at many metrics and get a broad picture. But I doubt you are going to find a "value investing" reason to buy AMZN at these levels, it's clearly a growth stock.

Re: Jeff Bezos's Net Worth Just Broke $100B

#99
post #88
post #28

Earlier quoted context omitted.

Realistically, BI won’t save him, or his progeny when/if it comes down to “pitchforks” any more than the French aristocracy could throw potatoes at starving peasants and hope to live. I can’t imagine how much good someone would have to do to justify concentrating a hundred thousand million dollars in their person. When so much of that probably wasn’t fairly subjected to taxation... well... maybe he deserves some “pit…

This is just crazy to me. Every purchase at Amazon is made because it makes the purchaser better off. Amazon out-competes by serving the customer better. If Bezos also benefits, that's great - he's made the world a better place. I'd love to richly reward millions of people for making the world better like Amazon has. Save the pitchforks for negative-sum beneficiaries - companies and individuals who benefit by leechin…

Nothing you said in any way justifies not paying tax.

Re: Jeff Bezos's Net Worth Just Broke $100B

#100
post #64

Earlier quoted context omitted.

I generally prefer free cash flow yield (fcf / dollar invested), although both PE and FCF can be fucked with depending on how certain expenses are classified. That being said, if I had to choose one of the two, I would go with FCF yield every time.

It's also very common now for companies to buy back a ton of stock thus lowering the share denominator in the earnings portion of the ratio, while not actually growing revenue much if at all.

You are referring to Earnings/Share, not Price/Earnings. It doesn't matter much anyway, if they can make the same amount of money with less invested capital that should increase their metrics. And there are good tax reasons to prefer share buybacks over dividends as a way to return cash to shareholders.
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