3 ms·

Hypothesis: From an analytical perspective, he must believe that the upside of Microsoft is limited enough, at least over the time horizon he's concerned about,

Hypothesis: From an analytical perspective, he must believe that the upside of Microsoft is limited enough, at least over the time horizon he's concerned about, to start cashing in Microsoft stock. He's a smart guy. He'd be trying to convert his holdings at the top of a value curve, right?

sdrothrock 9y ago
> He'd be trying to convert his holdings at the top of a value curve, right? Not necessarily. He just has to believe that the return on his investment will be greater (financially, in good will, in results) than the same money would be in Microsoft.
- jstanley 9y ago
  > he must believe that the upside of Microsoft is limited enough, at least over the time horizon he's concerned about, to start cashing in Microsoft stock. How is that different? If he expects to get a greater return elsewhere, that's because the upside of Microsoft is limited enough, over the time horizon he's concerned about.
  - sdrothrock 9y ago
    "at the top of a value curve" indicates to me that OP is expressing that he is imagining Gates seeing Microsoft's value as a line that will curve downward after this, or at least flatten out. I could be completely wrong. So what I was trying to express to OP is that while Microsoft's value may not sink (that is, now is not at the top of any curve), the value of the investment may be rising faster in various measures than the same money in Microsoft would be.
melling 9y ago
According to the headline, he doesn’t own a large percentage of Microsoft: “World’s richest person reduces Microsoft stake to 1.3 percent” I believe he has diversified: https://en.m.wikipedia.org/wiki/Cascade_Investment https://en.m.wikipedia.org/wiki/Cascade_Investment
pavlov 9y ago
The MSFT stock was transferred to the Gates Foundation, but the Foundation still decides independently when to actually sell it. It may take years. So I wouldn't read too much into the timing.
rodiger 9y ago
Being a smart guy != Being a good money manager. He likely has a lot of people overseeing his funds. Moving around billions of dollars takes a long time.
- brianbreslin 9y ago
  His investment manager is Michael Larson at Cascade Investments https://en.wikipedia.org/wiki/Michael_Larson_(businessman) https://en.wikipedia.org/wiki/Michael_Larson_(businessman)
SimonPStevens 9y ago
I could be wrong (I'm certainly no investor), but rather than trying to time a large sell at the peak, I think a smart investor would accpet that prediciting stock movement that accurately is hard and actually just sell slowly over time at a fixed rate to dollar cost average their exit.
- jon-wood 9y ago
  That would also have the advantage of not drastically affecting stock prices through the act of selling, since if investors know the Gates Foundation sells n shares a month come what may those sales can effectively be ignored.
bluGill 9y ago
Maybe, maybe not. One reason to sell an investment is of course you have reason to believe it is at (or near - timing the market exactly is typically impossible) the peak. Another reason to sell is you believe there is a better investment elsewhere so you want to transfer the money there. Another reason to sell is you want to use the money for something other then growing money. (buying a family heirloom with only sentimental value) When an insider sells stock that is considered meaningless by investors because there is no way to know which of the above is the case. When an insider buys stock that means the insider believes the company is a good investment and so that means something, but selling means nothing.

sdrothrock 9y ago

> He'd be trying to convert his holdings at the top of a value curve, right? Not necessarily. He just has to believe that the return on his investment will be greater (financially, in good will, in results) than the same money would be in Microsoft.

jstanley 9y ago
> he must believe that the upside of Microsoft is limited enough, at least over the time horizon he's concerned about, to start cashing in Microsoft stock. How is that different? If he expects to get a greater return elsewhere, that's because the upside of Microsoft is limited enough, over the time horizon he's concerned about.
- sdrothrock 9y ago
  "at the top of a value curve" indicates to me that OP is expressing that he is imagining Gates seeing Microsoft's value as a line that will curve downward after this, or at least flatten out. I could be completely wrong. So what I was trying to express to OP is that while Microsoft's value may not sink (that is, now is not at the top of any curve), the value of the investment may be rising faster in various measures than the same money in Microsoft would be.

melling 9y ago

According to the headline, he doesn’t own a large percentage of Microsoft: “World’s richest person reduces Microsoft stake to 1.3 percent” I believe he has diversified: https://en.m.wikipedia.org/wiki/Cascade_Investment https://en.m.wikipedia.org/wiki/Cascade_Investment

pavlov 9y ago

The MSFT stock was transferred to the Gates Foundation, but the Foundation still decides independently when to actually sell it. It may take years. So I wouldn't read too much into the timing.

rodiger 9y ago

Being a smart guy != Being a good money manager. He likely has a lot of people overseeing his funds. Moving around billions of dollars takes a long time.

brianbreslin 9y ago
His investment manager is Michael Larson at Cascade Investments https://en.wikipedia.org/wiki/Michael_Larson_(businessman) https://en.wikipedia.org/wiki/Michael_Larson_(businessman)

SimonPStevens 9y ago

I could be wrong (I'm certainly no investor), but rather than trying to time a large sell at the peak, I think a smart investor would accpet that prediciting stock movement that accurately is hard and actually just sell slowly over time at a fixed rate to dollar cost average their exit.

jon-wood 9y ago
That would also have the advantage of not drastically affecting stock prices through the act of selling, since if investors know the Gates Foundation sells n shares a month come what may those sales can effectively be ignored.

bluGill 9y ago

Maybe, maybe not. One reason to sell an investment is of course you have reason to believe it is at (or near - timing the market exactly is typically impossible) the peak. Another reason to sell is you believe there is a better investment elsewhere so you want to transfer the money there. Another reason to sell is you want to use the money for something other then growing money. (buying a family heirloom with only sentimental value) When an insider sells stock that is considered meaningless by investors because there is no way to know which of the above is the case. When an insider buys stock that means the insider believes the company is a good investment and so that means something, but selling means nothing.