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Holding your money cash is a pretty bad idea... Why wouldn't you invest it.

differentView 9y ago
So you can swim in it in your money bin.
adventured 9y ago
Holding your money in cash can be an extraordinarily good idea. See: 2007-2009. Gates for example, is dedicating his wealth to important causes such as eliminating malaria. If he does something foolish and rides a massive stock market bubble back down while he's fully invested, that could mean $30 or $40 billion less for attacking such problems in the next 10-20 years (there's no guarantee the market will come back to these levels soon, it could take a decade or multiple decades). If the market drops and stays low, he could easily be put into a situation where it's again time to perform some asset liquidation for funding purposes for the Bill & Melinda Gates Foundation. That is, those market 'losses' would become non-recoverable at that point. Sitting on $90.8 billion as he is, there is a good argument to be had given how high this market is, that that's a vast amount of money for him to distribute versus his age. He has N time left in his life, and an incredibly sum to dispose of yet and he isn't making nearly enough progress on that front versus his standing wealth. Between Gates & Buffett, and assuming modest growth in their current wealth levels, the Gates Foundation has to figure out how to productively distribute perhaps $250+ billion yet over 25-30 years. The target was to do so in Bill / Melinda's lifetimes, then they shifted it to within a decade or two of their passing. That's not going to happen, they have too much money and can't dispose of it fast enough.
- ratatouille72 9y ago
  In hindsight
  - adventured 9y ago
    The dotcom bubble wasn't subtle. The housing bubble wasn't subtle. The stock market presently trading at an extremely elevated multiple is not subtle (much less while simultaneously US GDP growth is averaging historic lows, and global growth is just OK). Simply put, stocks have soared without the earnings to support the move, it's overwhelmingly multiple expansion. It doesn't require a magic 8-ball to be prudent and lighten up after the S&P and Dow have tripled from the bottom in 8 years.
    - davidivadavid 9y ago
      Sure it does. That's why people are notoriously bad at timing markets.
    - pilom 9y ago
      Low interest rates explain a lot of the P/E changes. Same reason houses get more valuable when interest rates are low.
seanmcdirmid 9y ago
Not to mention the bugs (from what I learned watching breaking bad).

So you can swim in it in your money bin.

Holding your money in cash can be an extraordinarily good idea. See: 2007-2009. Gates for example, is dedicating his wealth to important causes such as eliminating malaria. If he does something foolish and rides a massive stock market bubble back down while he's fully invested, that could mean $30 or $40 billion less for attacking such problems in the next 10-20 years (there's no guarantee the market will come back to these levels soon, it could take a decade or multiple decades). If the market drops and stays low, he could easily be put into a situation where it's again time to perform some asset liquidation for funding purposes for the Bill & Melinda Gates Foundation. That is, those market 'losses' would become non-recoverable at that point. Sitting on $90.8 billion as he is, there is a good argument to be had given how high this market is, that that's a vast amount of money for him to distribute versus his age. He has N time left in his life, and an incredibly sum to dispose of yet and he isn't making nearly enough progress on that front versus his standing wealth. Between Gates & Buffett, and assuming modest growth in their current wealth levels, the Gates Foundation has to figure out how to productively distribute perhaps $250+ billion yet over 25-30 years. The target was to do so in Bill / Melinda's lifetimes, then they shifted it to within a decade or two of their passing. That's not going to happen, they have too much money and can't dispose of it fast enough.

ratatouille72 9y ago
In hindsight
- adventured 9y ago
  The dotcom bubble wasn't subtle. The housing bubble wasn't subtle. The stock market presently trading at an extremely elevated multiple is not subtle (much less while simultaneously US GDP growth is averaging historic lows, and global growth is just OK). Simply put, stocks have soared without the earnings to support the move, it's overwhelmingly multiple expansion. It doesn't require a magic 8-ball to be prudent and lighten up after the S&P and Dow have tripled from the bottom in 8 years.
  - davidivadavid 9y ago
    Sure it does. That's why people are notoriously bad at timing markets.
  - pilom 9y ago
    Low interest rates explain a lot of the P/E changes. Same reason houses get more valuable when interest rates are low.

seanmcdirmid 9y ago

Not to mention the bugs (from what I learned watching breaking bad).