The Wall Street Journal must have better things to do with its time and all that expensive newsprint. The paper reports that CEOs of 175 large US companies have lost over $42 billion in net worth from the end of their most recent fiscal years though last week.
By this calculations, Warren Buffett is down $9.6 billion. Microsoft's (NASDAQ: MSFT) has seen his piece of the software company drop by almost $5 billion in value.
The reason that the data is foolish is that a loss is not really ever a loss unless and until the underlying securities are sold. People like Buffett and Ballmer don't need billions of dollars now, and they are still extraordinarily rich.They are unlikely sellers Two years from now, their net worth may be higher than they were in 2007. Who knows?
The calculation of wealth, made popular by the Forbes 400 is an exercise in futile math. What the rich are worth, especially if their money is in liquid securities is a snapshot in time, and one which can change hour-by-hour.
Why bother to eat of the time of good reporters?
Douglas A. McIntyre is an editor at 247wallst.com.
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Reader Comments (Page 1 of 1)
10-23-2008 @ 5:57AM
BHarrison said...
Yes, the key factor is "having enough" to ride out the economic storm until things turn around, which may be three to five years or even longer.
Whether a person is an upper middle class or lower middle class is relatively immaterial. The key factor is whomever does not have the monetary (cash) reserves to ride out the recession, is in danger of being forced into bankruptcy. Those upper middle class people who are mortgaged or endebted beyond what they can afford if they become unemployed, are readily at danger of "losing everything" and becoming empoverished.
Those upper middle class retirees who had everything invested in what are now risky investments may easily beome almost destitute. Cold hard "cash inhand" is the only "financial security'; and even that will be eroded by the coming escalating inflation.
A lot of previously "affluent people" are in danger of becoming somewhat destitute.
10-23-2008 @ 7:05AM
Reg Joe Moe said...
Boo-hoo-hoo... And we’re all weeping so hard in concert for every single one of them.