Let’s dive into the ocean of wealth, where the currents have been particularly fickle this year. Forbes just unveiled its 2023 World’s Billionaires List, and oh boy, the view from the top is vastly different.
While the rich stay rich, there’s a noteworthy $200 billion dip from last year amongst the top 25 moguls, whose collective net worth stands at $2.1 trillion. I hope that gives you some perspective, and dare I say, some consolation, next time your portfolio takes a minor hit.
No one felt the pinch more than Jeff Bezos, losing a staggering $57 billion, primarily due to Amazon shares nosediving by 38%. As Warren Buffet once quipped, “You only find out who is swimming naked when the tide goes out.” It appears that even those in high-tech swimsuits aren’t immune to a turbulent market.
Ironically, Elon Musk’s title as the world’s richest was short-lived, primarily due to his costly purchase of Twitter and the sale of Tesla shares, which jolted investors and saw him $39 billion lighter. It seems in the grand circus of finance, Musk played trapeze artist one too many times.
While fortunes have dipped, some billionaires managed to ride the wave to greater prosperity. Case in point: Bernard Arnault, the head of luxury goods behemoth LVMH, whose wealth swelled by $53 billion to claim the No. 1 spot. The LVMH example indicates that investment in luxury goods can still provide substantial returns, reminding us that sometimes, it pays to have expensive tastes.
A word for the wise: staying cognizant of the sectors and markets where wealth is rising, like Arnault in luxury goods, or Spanish retailer Amancio Ortega with a $17.7 billion increase, can often unlock hidden investment opportunities.
Musk’s fall and Arnault’s rise offer a couple of strategies to consider. First, diversification. Musk’s fortunes were tied heavily to Tesla and Twitter, leading to his downfall, whereas Arnault’s wealth is spread across several luxury brands, shielding him from such precipitous drops. Second, investing in staple goods or services. Luxury items, surprisingly, fall into this category. Even during economic downturns, the world’s well-off continue to buy high-end products, making luxury goods a surprisingly robust sector.
Our very own Canadian media mogul, David Thomson, and Nike co-founder Phil Knight, have newly joined this illustrious top 25 club, reiterating the power of media and retail sectors in driving massive wealth. Perhaps it’s time to look for under-the-radar opportunities in these sectors.
Friends, let’s remember that the dance of billions is less a tango and more a cha-cha, with steps forward, steps backward, and even some sideways. While the band plays on, stay focused on the beat of the market and keep in tune with the rhythm of the financial world.
The goal isn’t necessarily to become a billionaire but to employ the strategies that made them rich. So stay savvy, stay invested, and most importantly, stay pioneering.
Till next time, Investing Pioneers. Remember, the best investment you can make is in your financial education.
Peter Burke, signing off