If Bill Gates had kept his 45% share of Microsoft from after the IPO then he would be worth $1 trillion and not $129 billion today. This would also need to factor in Bill Gates donating about $57 billion to charities. He almost completely missed the stock booms from Microsoft, Google, Apple, Facebook and Netflix. Despite insider info and deal access. He shorted $TSLA instead of $NKLA or $LCID and did not buy heavily into $MSFT when he could see Nadella making the right moves in advance.
Let us give Bill Gates a pass on selling Microsoft down to the point when Steve Ballmer had more shares than Bill. Bill Gates was investing in a lot of land, railways, Warren Buffet’s Berkshire Hathaway. These investments did not get returns better than just buying the SP500 Index.
Bill Gates was still on the Board of Microsoft. He was getting all of the information. Steve Ballmer was CEO from 1998-2013 had let Microsoft drop 36% over the 15 years of him being CEO. Bill Gates did not recognize and participate in the CEO Satya Nadella raising the stock by 1000%. Bill was there seeing that Nadella was trying to change the software to a subscription pricing model and making huge strides with the cloud computing business. Getting back in with 10% of his wealth would have resulted in doubling his money. Bill would be $68 billion richer than he is today by buying in with $7.6 billion of his $76 billion 2014 wealth.
Bill Gates personally chose to start shorting Tesla stock in 2020-2021 and is still shorting Tesla stock. Bill was using about $3 billion of his wealth to do this. Bill might be able to double his money on this bet if Tesla went to zero. Bill reportedly had lost $1.5 billion part way through this short. Bill likely gained some when Tesla went down from $400 down to $100 but Bill will be losing again with the shares back to $270.
The fact that Bill Gates was willing to put many billions of dollar into shorting Tesla shows that his poor investing performance was not because of a complete avoidance of financial risk. If one were to use portfolio theory and asset diversification then having very stable single digit investment returns is justifiable on a risk adjusted basis.
However, Bill could have chosen to short Lucid Motors, Nikola Motors and other scammy electric vehicle companies. There are all kinds of clearly better stocks to short than Tesla. Those stocks are down over 90% from trading levels in 2020-2021. You could bet against electric vehicles and bet against clearly bad companies, with bad management and bad business models. Bill Gates said that he shorted Tesla stock because he thought that electric car supply would exceed electric car demand. He was making bad choices on how to make money from that analysis and belief.
At no point did Bill Gates, who was deeply involved in the personal computer and technology industry, choose to make major investment in major technology companies. He had some Google shares and had Apple via Berkshire Hathaway. However, Bill never choose to overweight the booming technology stocks.
It was common knowledge in the investing world a decade that the FANG, FAANG and MAANG stocks were almost sure fire great stock returns. They averaged 25% per year for over a decade. Those stocks were Facebook, Netflix, Google, Apple, Microsoft and Amazon.
Bill Gates as a super wealthy person would also get preferred access to all of the best IPOs and pre-IPO companies. Li Ka-shing made over 600% return on buying Facebook before its IPO.
There are all kinds of investing advantages that Bill had and has to get far better returns.
Brian Wang is a Futurist Thought Leader and a popular Science blogger with 1 million readers per month. His blog Nextbigfuture.com is ranked #1 Science News Blog. It covers many disruptive technology and trends including Space, Robotics, Artificial Intelligence, Medicine, Anti-aging Biotechnology, and Nanotechnology.
Known for identifying cutting edge technologies, he is currently a Co-Founder of a startup and fundraiser for high potential early-stage companies. He is the Head of Research for Allocations for deep technology investments and an Angel Investor at Space Angels.
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Isn’t that what he said he would do? His plan is to get rid of all his money before he dies.
I mean if you are optimizing for maximizing your own happiness in a lifespan anything left over is wasted energy right?
He seems smart to be buying up farmland
Hi Brian
I feel Gates is something of an irrelevance these days, except for his humanitarian efforts. Musk has always been right to ignore him, even more so after Gates’ shorting efforts.
Bill Gates also personally missed the Internet revolution while still CEO of Microsoft. It was actually the main reason he turned the company over to his friend, Steve Ballmer, who couldn’t make the company work for over a decade in the early 2000s, when the internet was making MS Office and Windows look obsolete.
He did make a smart investment in bailing out Apple when Steve Jobs returned to head the company, but then, despite having more knowledge of the company than almost anyone except Jobs, failed to capitalize on the company that would far exceed Microsoft in market cap while Jobs was still alive.
His land investments have spawned a cottage industry in conspiracy theories, but in reality, they were just pretty dumb and maybe anti-farmer.
Buying land is a decent hedge against the chance of hyperinflation. I expect that’s what it was about.
He just needs to give his money to me
There is no better poster child for “at the right place at the right time” than Bill Gates. It is better to be lucky than good many times. Bill and Zuck are two of a kind.
Clearly, he’s not the typical businessman. He, even more, confirms Yanis Varoufakis’s thesis of technofeudalism
That poor beggar
He has made the point that he’s beyond the pursuit of uber-riches, dedicated to whatever humanitarian causes he says to push. I personally find his activities a bit suspect of late, being an avowed sympathizer of degrowth and at the core of the neo-vaccination movement using RNA and other novel techniques, with so many controversies of late.
As long as no wrongdoing is proven, fine, but in the end, it’s the amount of riches what defines his persona, influence and power.
If he takes his fortune to zero, he would cease being relevant.