Archives of “wealth” tag

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Think it’s too late? The world’s greatest fund manager didn’t make money until he was 52

  
Analysis, Education
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Jim Simons had modest wealth at 52; now he’s worth $23 billion

Jim Simons
Financial markets — and risk taking in general — are largely the domain of the young. Early adulthood is the time to swing for the fences while middle age is a time for prudence, perhaps risking a manageable part of the nest egg.
Yet that’s not always true. It’s particularly untrue of some of the world’s greatest investors.
Among them is Jim Simons, the king of quants. Yesterday Gregory Zuckerman published “The Man Who Solved the Market: How Jim Simons Launched the Quant Revolution.”
It details how a 40-year old math professor walked away from a job at Stony Brook University to try trading currencies. He had no idea what he was doing but raised $4 million with a few partners. He recruited renowned mathematicians to help him. It didn’t work and losses topped $1 million.
“If you make money, you feel like a genius,” he told a friend. “If you lose, you’re a dope.”
He gathered more data and persevered through the 1980s with a mixed record. In 1989 he lost 4%.
Finally, Simons along with recently recruited colleagues Henry Laufer and Elwyn Berlekamp, started to focus on short-term patterns — Monday’s price action often followed Friday’s, while Tuesday saw reversions to earlier trends.
It worked and the Medallion fund gained 55.9% in 1990. It hasn’t stopped. His fund as generated average returns of 66%, racking up gains of $100 billion. No other fund or manager is even close. A $10,000 investment 30 years ago excluding fees would be worth $40 billion today. Even after fees, it would be worth $195 million.
How the fund makes money is one of the world’s most-closely guarded secrets but it’s story isn’t. Simonds certainly had mathematical talents but he know almost nothing about markets when he started out at age 40 and managed to amass one of the world’s great fortunes.

The 1% Gets A Scare – More To Come?

  
Analysis, Education
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Most Americans have spent the last few years pressed up against the proverbial bakery window, watching the 1% enjoy a life of ever-increasing wealth and seemingly total indifference to the multitudes who aren’t favored by zero interest rates, big trust funds and political/corporate connections.
The one consolation for the have-nots has been that, by owning few stocks and bonds, they would suffer less when those bubble markets did what bubbles always do, which is burst.
Friday was a small but satisfying taste of that eventuality.
From Bloomberg:

World’s Richest People Lose $68.5 Billion in Stock Selloff

The fortunes of the world’s 500-richest people dropped by $73.9 billion Friday as equity markets swooned with investor worries about the pace of interest rate hikes in the U.S. Warren Buffett led the declines, shedding $3.3 billion to end the day at No. 3 on the Bloomberg Billionaire Index with $90.1 billion.

The chart shows about $100 billion of play money evaporating in the past week. Not enough to seriously inconvenience most of the people on Bloomberg’s billionaires list, but still a nice reversal of fortune versus the average person with a house, small bank account and not much more – who didn’t lose a thing.
As for whether Friday was just a blip in an ongoing “secular bull market” or a sign that fundamentals are at last gaining the upper hand on “liquidity,” that remains to be seen. Longer-term though, there can’t be much doubt that today’s stock and bond valuations are higher than they’ll be during the next downturn.
Here’s a chart from John Hussman’s latest (Measuring the Bubble) that illustrates the point.

Where the Wealthy Are Putting Their Money?

  
  Education
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The new “World Wealth Report” for 2015 was released last week fromCap Gemini and RBC Wealth Management. The focus is on the population of high net worth individuals, or HNWIs as the report calls them. The report, based on a survey of more than 5,100 wealthy people in 23 major markets, is packed with fascinating data and graphics.

You are probably familiar with some of the key themes and findings:

• Tremendous amounts of wealth have been accumulated during the past five years.

• Much of this wealth is concentrated in the top 1 percent; and a large share of that wealth is concentrated in the top 1 percent of the 1 percent.

• The very wealthy have a disproportionate impact on policy, investing and the economy.

No big surprises there. However, some of the specific data points were intriguing:

– The global HNWI population is 14.65 million, with total wealth of $56.4 trillion.

– The U.S. HNWI population is 4.68 million, with total wealth of $16.23 trillion.

– The U.S. as a region is ranked first for HNWI wealth and second for HNWI population, behind the Asia-Pacific region.

Here are a few other points worth considering:

 

Continues here: How Rich Are the Rich?

What Does A Trader Do ?

  
  Education
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smile-cute

One thing that I couldn’t accept as an attorney (for the five minutes I seriously considered that as a profession) was that I’d be confronted with the temptation to make money from projects and clients with whom I did not want to work. The wealth that is created from doing a law-job is wealth that comes from the support of, allegiance to, and active promotion of a client’s business. (more…)

40+40+5 Super Wealthy People Have More Money Than The Poorest 3.5 Billion Combined

  
Analysis, Education
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The global economy is structured to systematically funnel wealth to the very top of the pyramid, and this centralization of global wealth is accelerating with each passing year. According to the United Nations, 85 super wealthy people have more money than the poorest 3.5 billion people on the planet combined.  And 1.2 billion of those poor people live on less than $1.25 a day.  There is something deeply, deeply broken about a system that produces these kinds of results.  Seven out of every ten people on the planet live in countries where the gap between the wealthy and the poor has increased in the last 30 years.  Despite our technological advances, somewhere around a billion people go to bed hungry every single night.  And when our fundamentally flawed financial system finally does collapse, it will be the poor that will suffer the worst.

Now, let me make one thing clear at the outset.

Big government and more socialism are not the answer to anything.  Big government and more socialism almost always result in increased oppression and increased poverty.  If you want to see where that road ultimately leads to, just look at North Korea.

What we need is a system that empowers individuals and families to work hard, be creative, build businesses and to take care of themselves.

But instead, we have a system where all power and all wealth are increasingly controlled by giant banks and giant corporations that are in turn controlled by the global elite.  The “financialization” of the global economy has turned almost everyone on the planet into “deft serfs”, and the compound interest on all of that debt enables the global elite to constantly increase their giant piles of money.

As I have written about previously, the total amount of government debt in the world has increased by about 40 percent since the last recession. (more…)

Half Of The Population Of The World Is Dirt Poor – And The Global Elite Want To Keep It That Way

  
Analysis, Education
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Could you survive on just $2.50 a day?  According to Compassion International, approximately half of the population of the entire planet currently lives on $2.50 a day or less.  Meanwhile, those hoarding wealth at the very top of the global pyramid are rapidly becoming a lot wealthier.  Don’t get me wrong – I am a very big believer in working hard and contributing something of value to society, and those that work the hardest and contribute the most should be able to reap the rewards.  In this article I am in no way, shape or form criticizing true capitalism, because if true capitalism were actually being practiced all over the planet we would have far, far less poverty today.  Instead, our planet is dominated by a heavily socialized debt-based central banking system that systematically transfers wealth from hard working ordinary citizens to the global elite.  Those at the very top of the pyramid know that they are impoverishing everyone else, and they very much intend to keep it that way.

Credit Suisse had just released their yearly report on global wealth, and it shows that 45.6 percent of all the wealth in the world is controlled by just 0.7 percent of the people…
 As Credit Suisse tantalizingly shows year after year, the number of people who control just shy of a majority of global net worth, or 45.6% of the roughly $255 trillion in household wealth, is declining progressively relative to the total population of the world, and in 2016 the number of people who are worth more than $1 million was just 33 million, roughly 0.7% of the world’s population of adults. On the other end of the pyramid, some 3.5 billion adults had a net worth of less than $10,000, accounting for just about $6 trillion in household wealth.

And since this is a yearly report, we can go back and see how things have changed over time.   (more…)

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