5 ms·

The Rich Got Richer During Covid-19

27 points by danboarder 6y ago

hannofcart 6y ago
I find this constant tom-tomming of wealth increases based on increases from March 2020 to date quite disingenuous. The primary reason I find it so is because they measure the rise from the lows in March to the highs of this year (as evident in the infographics in the article). Here's the thing, while I'm nowhere near even a millionaire, my net wealth also increased by around 50% since March of last year because I'm mostly invested in index funds. But if you make the comparison from Jan 2020 to Jan 2021, it's a much more modest (albeit decent) 14%. Most of that 50% was just the recovery from the hammering that the index took during Feb-March. Sure, some outliers in that list have seen their investments see dramatic rises, but that's true in any given year. What's more, I don't remember anyone shedding too many tears for 'capitalists' who saw their fortunes take a hammering in the early part of March. I used to wake up with cold sweats worrying how much the index was going to tank the next day.
- zibzab 6y ago
  But you are definitely not poor either. How much of your net worth is invested in stocks and funds? Would an average American be able to do the same?
  - Dma54rhs 6y ago
    Everyone has a pension fund?
  - amanaplanacanal 6y ago
    It appears that 56% of American workers participate in some sort of pension or retirement savings plan.
  - hannofcart 6y ago
    I'm not an American but my country's index roughly correlates with the DOW. > Would an average American be able to do the same? Probably not. How does that matter here though? Even if you are making the case that the vast majority of the population does not participate in the broader stock market, and even when that's true, the fact remains that the article is propagating a deliberately misleading idea that the wealth of billionaires 'increased dramatically during the pandemic' by using the lows in March as the base.
JackMorgan 6y ago
Percent of stock growth without including predicted future growth of that stock it is a useless metric. For the whole year of 2020, stock rose 14%, but the CAPE ratio also climbed significantly, indicating the 14% comes at a cost of expected lower returns/growth going forward. Using standard CAPE adjustments, it tracked right around 6% real growth for the year. Stock owned for 2020 will likely grow slower in future years to make up for 2020. Unless a person immediately cashed out to buy something at the end of the year, which most people who own stock probably won't do. So yes, while anyone holding S&P500 saw a 14% increase for 2020, they likely should expect a couple lean years (or inflation) such that they actually only netted about 6%.
perryizgr8 6y ago
Yup that's what usually happens when governments take extraordinary authoritarian measures and restrict personal liberties of everybody.
a0-prw 6y ago
Everybody knows ;) https://youtu.be/Gxd23UVID7k https://youtu.be/Gxd23UVID7k And the lyrics https://www.azlyrics.com/lyrics/leonardcohen/everybodyknows.html https://www.azlyrics.com/lyrics/leonardcohen/everybodyknows....

27 points by danboarder 6y ago

I find this constant tom-tomming of wealth increases based on increases from March 2020 to date quite disingenuous. The primary reason I find it so is because they measure the rise from the lows in March to the highs of this year (as evident in the infographics in the article). Here's the thing, while I'm nowhere near even a millionaire, my net wealth also increased by around 50% since March of last year because I'm mostly invested in index funds. But if you make the comparison from Jan 2020 to Jan 2021, it's a much more modest (albeit decent) 14%. Most of that 50% was just the recovery from the hammering that the index took during Feb-March. Sure, some outliers in that list have seen their investments see dramatic rises, but that's true in any given year. What's more, I don't remember anyone shedding too many tears for 'capitalists' who saw their fortunes take a hammering in the early part of March. I used to wake up with cold sweats worrying how much the index was going to tank the next day.

zibzab 6y ago
But you are definitely not poor either. How much of your net worth is invested in stocks and funds? Would an average American be able to do the same?
- Dma54rhs 6y ago
  Everyone has a pension fund?
- amanaplanacanal 6y ago
  It appears that 56% of American workers participate in some sort of pension or retirement savings plan.
- hannofcart 6y ago
  I'm not an American but my country's index roughly correlates with the DOW. > Would an average American be able to do the same? Probably not. How does that matter here though? Even if you are making the case that the vast majority of the population does not participate in the broader stock market, and even when that's true, the fact remains that the article is propagating a deliberately misleading idea that the wealth of billionaires 'increased dramatically during the pandemic' by using the lows in March as the base.

JackMorgan 6y ago

Percent of stock growth without including predicted future growth of that stock it is a useless metric. For the whole year of 2020, stock rose 14%, but the CAPE ratio also climbed significantly, indicating the 14% comes at a cost of expected lower returns/growth going forward. Using standard CAPE adjustments, it tracked right around 6% real growth for the year. Stock owned for 2020 will likely grow slower in future years to make up for 2020. Unless a person immediately cashed out to buy something at the end of the year, which most people who own stock probably won't do. So yes, while anyone holding S&P500 saw a 14% increase for 2020, they likely should expect a couple lean years (or inflation) such that they actually only netted about 6%.

perryizgr8 6y ago

Yup that's what usually happens when governments take extraordinary authoritarian measures and restrict personal liberties of everybody.

a0-prw 6y ago

Everybody knows ;) https://youtu.be/Gxd23UVID7k https://youtu.be/Gxd23UVID7k And the lyrics https://www.azlyrics.com/lyrics/leonardcohen/everybodyknows.html https://www.azlyrics.com/lyrics/leonardcohen/everybodyknows....