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Just today a friend shared whats below. I have no claim that it is true or verified. "After Bill Gates became friends with Warren Buffett, he began to diversif

Just today a friend shared whats below. I have no claim that it is true or verified. "After Bill Gates became friends with Warren Buffett, he began to diversify his portfolio and sold Microsoft shares. Bill Gates' fortune today is 138 billion dollars, if he hadn't diversified it would be 1.33 trillion dollars. Be careful with diversification and with friends who recommend it." EDIT: there is at least one source https://finance.yahoo.com/news/bill-gates-could-trillionaire-today-163852659.html https://finance.yahoo.com/news/bill-gates-could-trillionaire...

majani 3y ago
On the other hand Munger said that diversification is for those who don't know what they're doing. So maybe Gates wanted to stock pick and Buffet talked him into diversifying safely
OJFord 3y ago
Ok, now imagine a concentrated holding by founder of something like WeWork, or a fallen giant of yesteryear (especially wrt inflation / opportunity cost by comparison to some broad index). For every formerly concentrated investor who would've done well to stay concentrated, there's tonnes who did and shouldn't have, or didn't and would've suffered if they had.
episteme 3y ago
It still could have been the best decision at the time. Imagine you bet on a coin flip landing heads. After it's flipped and lands heads it's not useful to say you should have bet your net worth on it.
graton 3y ago
Tell that to the Enron employees who had all of their retirement 401k in Enron stock. Yes of course if someone is able to pick the exact stocks that will go up the most then they will do wonderful. The problem is that it is impossible to know which stocks are going to succeed or fail. Also the Bill & Melinda Gates foundation is estimated to be worth $69 billion. And probably most of that has come from Bill Gates.
- cheonic720 3y ago
  > The problem is that it is impossible to know which stocks are going to succeed or fail. Yet casinos make money despite not knowing the outcome of each game. You only need to be correct more times than you are wrong (in $ space, not number of trials).
  - mckn1ght 3y ago
    Casino games have known probabilities, so the expected value can be used to project long term earnings. The more games people play over time, the more their projections will converge. Nobody knows the odds a company will profit or lose money or by how much, or if they will go bankrupt, merge with or acquire another company, experience hostile takeover, scandals, be mistaken for the wrong ticker symbol like Zoom, become the target of meme gamma/short squeezes like Gamestop, become the target of antitrust investigations, etc.
    - cheonic720 3y ago
      > Nobody knows the odds a company will profit or lose money or by how much, or if they will go bankrupt, merge with or acquire another company Do you think companies randomly decide merge? Do you think antitrust investigations are random? The SEC flips a coin every morning? The markets are proven to be NOT efficient. Now, for retail traders like FAANG SWEs, the markets are practically efficient.
      - ben_w 3y ago
        Indeed. I was thinking the other day about how a perfectly efficient market would have no profit, and thereby demonstrate the exact same absence of incentives that is often used to argue that state-owned businesses and service providers are bad for the economy and "we" shouldn't have them. I was going to lead with "if you have some insider information and can use it without being charged with violating insider trading rules, you can do better than most", but that seemed more pertinent. Buuuuut you also have people who hear the magic words "won the 1997 Nobel Memorial Prize in Economic Sciences", turn their brains off, bet everything on a misunderstanding, and after a few good years suddenly find that all the money evaporates everywhere at the same time. This is relevant to the quoted passage: > Nobody knows the odds a company will profit or lose money or by how much, or if they will go bankrupt, merge with or acquire another company (Also, is it my imagination/pure coincidence, or are you the same person creating a lot of new accounts that each has only one or two comments?)
rockbruno 3y ago
Why "be careful"? Yes, he could have made more money, but he would also be risking losing all of it. The purpose of diversification is not to make you more money, it's to reduce your risk of losing everything. It worked as intended.
tutfbhuf 3y ago
"In 1999, his fortune was almost three times that of Buffett, who was the second-richest person at the time. That year, Gates’s wealth surged past the $100 billion mark" I just ran a backtest[1] of Microsoft (MSFT) vs S&P 500 (SPY) starting in 1999 with $100 billion (dividends reinvested). MSFT would have resulted in $1.7 trillion, and SPY in $600 billion. Given the significantly higher risk of investing in MSFT versus SPY, I think SPY would have been the better choice nonetheless. Moreover, MSFT only started to perform stronger since 2016, before that, SPY was ahead of MSFT most of the time. [1]: https://www.portfoliovisualizer.com/backtest-portfolio#analysisResults https://www.portfoliovisualizer.com/backtest-portfolio#analy...
jeffybefffy519 3y ago
Sounds not true because Buffet has specifically said not to diversify in shareholder updates.
senko 3y ago
If your friend wasn't trolling and genuinely believed this advice, they have a very poor understanding of risk, and it would be beneficial to them to research it a bit (by which I don't mean click-driven youtube or tiktok influencers). To be fair, risk, diversification and other important financial concepts are not intuitive and are not taught (in a simple and intuitive way) to people although they're essential to majority of people in well-off societies. In a nutshell, this is a great example of survivorship bias. Yes, with perfect future information, Bill Gates could've been much richer. So would I, and I would only need the winning lottery numbers! Lacking this crystall ball, Buffett's advice was (and remains) correct. Also note at the utlity aspect - as a purchasing power, $1.33T and $138B are the same, and the only meaningful difference is to keep some kind of score. You can buy basically anything that's for sale, burn it to the ground, and still remain filthy rich (recently proven by Musk's acquisition of Twitter, on which he spent around $23B of his own money, according to quick web search).
- jraby3 3y ago
  Charlie munger and buffet are famous for not diversifying very much. They deeply research companies and then buy them long term. Currently half the Berkshire portfolio is in apple. Also bill gates probably wants to change the world for the better with his assets and has done so repeatedly. So the trillion dollar difference probably would have had a huge positive impact on the world.
  - candiodari 3y ago
    I don't understand where this Berkshire reverence comes from. Buffet didn't become rich through stocks. His accomplishment is to stay rich by investing, primarily in insurance contracts, and it does look like that is a good way to summarize Berkshire: it's a backend investment fund for his insurance business. It makes his large insurance contracts a lot more competitive. And about that part, he's very tight lipped. He invests well, but he's hardly the only one, and Berkshire would not work without the backend insurance business generating the amounts of funds he has to invest in the stock market. So all of his advice is mostly pointless, unless you have 100 billion lying around. I'm saying: if you want to beat Berkshire financial performance, they key to that ... is not investment. Which is the great con Buffett pulls. He shows large amounts of money and a very prudent investment strategy, and with that attracts funds to run his insurance business. NOT the other way around. This is the central component of a huge insurance business: you need a LOT of money, available as capital, to run it. To be fair, I've never heard of him lying about this either, but he's not exactly forthcoming with this information. He also does remarkably little investing with the time he has. Clearly he's spending the vast majority of his time on his insurance business, not his investment business.
d1sxeyes 3y ago
If that is indeed true, then Bill Gates must be kicking himself for losing all that money. Drinking his champagne. In his hot tub. On his yacht in the mediterranean.
HenryBemis 3y ago
Between 138bn with high degree of certainty/low risk and 1.33tn (or bust) with single-stocks, I'd take the 138bn any day. And to change the scale to k/m, I'd take 138k that I know will be there at my old age, than a coin-toss 1.33m (or bust). Diversification is to (overall) lower your risk and sleep better at night. Otherwise investing solely in single stocks, you could as well go to the races and bet on Land Cookie (an imaginary offspring of Sea Biscuit). EDIT: hindsight is (always) 20/20.
that_guy_iain 3y ago
Hasn't Bill Gates spent a large part of his wealth? And has been doing so for 10-20 years?
- pi-e-sigma 3y ago
  LOL, you fell for it
break_the_bank 3y ago
Apparently Steve Ballmer didn't diversify like Bill Gates did and he will soon over take Bill when it comes to networth if MS keeps going up.
- al_borland 3y ago
  Imagine what he’d have if he actually helped Microsoft while he was CEO.
  - deezleguy 3y ago
    I’m no fan of Ballmer by any stretch, but Azure was launched under his watch and is why MS is doing so well these days.
  - pyrale 3y ago
    It seems Ballmer was memed to death, but he did actually do a lot of the hard, transitional things that allow ms to shine today. Thinking of the developers speech meme, and reflecting upon how microsoft became a significant OS pillar, developed VScode and the LSP protocol, bought github, etc - and looking at the significant subsequent rise of devrel roles, it seems like his vision was 20/20, regardless of the delivery.
    - al_borland 3y ago
      Ballmer left Microsoft in early 2014. VS Code was first released in 2015. The collaboration for LSP was announced in 2016. GitHub was acquired by Microsoft in 2018. It seems like these are Nadella’s successes. Someone else mentioned Azure, which is the division Nadella ran before taking over as CEO. It seems he was likely the key there as well. Meanwhile, during Ballmer’s time at the helm, the stock price was flat the entire time, all growth was under Gates and Nadella. Ballmer famously missed modern smartphones and attempts to course correct all failed, to the point that they gave up. Xbox started under Ballmer, but it’s been reported that it has lost $3b over the last 10 years. When he took over Windows had control of nearly the entire desktop market, when he left it has dropped significant with Apple now holding about 20%. People no longer believe Windows is required to get work done. And when looking at all operating systems, Android is about to surpass Windows, if it hasn’t already. He was giving a company with an overwhelmingly dominant position and left his successor with an uphill battle for mainstream relevance. It’s crazy when people talk about FAANG, there is no “M”. I think that is due to Ballmer’s mismanagement during the entire era which gave rise to these companies. Ignoring all the memes, I think he did a bad job. At best, he kept them in the game enough to give Nadella a chance for a recovery, which has been going well.
vik0 3y ago
https://nitter.net/nntaleb/status/1743935809877671957#m https://nitter.net/nntaleb/status/1743935809877671957#m :)
jjallen 3y ago
If this isn't the perfect example of "hindsight is 20-20" I don't know what is.
stavros 3y ago
After Bill Gates became friends with Warren Buffett, I chose to not diversify my Blockbuster-heavy portfolio by buying Microsoft shares. My $138 is worth $1.33 today.
al_borland 3y ago
Once you’re already rich, the goal is no longer to maximize upside at all costs, it’s to remove the risk from the table to so the fortune can sustain you the rest of your life. Microsoft could have just as easily fallen apart once Gates left the company and never recovered. Ballmer was a really bad successor. Even if Gates left money on the table in hindsight, his investments are still growing faster than he can give it away.
gchokov 3y ago
What if Microsoft shares went to $0? Diversification is risk management, not optimisations of returns in the sense you present this.
- hef19898 3y ago
  Well, there were people actually holding Gamestop...
nkrisc 3y ago
> Bill Gates' fortune today is 138 billion dollars, if he hadn't diversified it would be 1.33 trillion dollars. The only difference between those numbers, in terms of net worth, is how much you can give away.
- Ekaros 3y ago
  And one might also question how much of that money can be given away and how much that would actually affect the price. You can not sell stock valued that high endlessly.
MangoCoffee 3y ago
you can say that now but you don't know that at the time and this is about risk management. who can say at that time that Microsoft will shoot off? Microsoft under Steve Ballmer's era is a great company. Microsoft made a lot of money selling software and yet its stock price was never over $20+. Microsoft's stock price took off under Satya Nadella. however, there's too much unknown to bet on Satya Nadella. what if Ballmer never retired? what if Satya Nadella got a better offer from another big tech? what if Microsoft picks a different CEO than Satya Nadella?
refurb 3y ago
Now do all the losers.
RickJWagner 3y ago
Buffet has given mixed signals on this. On one hand (and I think the strongest hand) he has endlessly endorsed low-cost index funds. But on the other hand, he has been known to scorn wide portfolios as 'de-worseification'. He himself picks a handful of companies after much analysis (and does very well at it, of course). For anybody that's not Warren Buffet, diversification is a great idea.
- bombcar 3y ago
  He always endorses index funds for people who do not spend their entire life doing the stonks and even for most who do. Berkshire itself is basically an index fund of Buffet’s index. What he’s most strongly arguing against is managed funds where people “sell the ability to beat the market” which is bullshit.
deepGem 3y ago
This is all in hindsight. When you are looking forward, with that kind of money, you have to certainly think about risk and diversify. That said, Bill Gates was more or less left with no options but to sell some MS shares. Almost all founder CEOs do this, 1 to de-risk their wealth and 2 to also perhaps to reduce exposure to scrutiny. Whoever is sitting on 10B is not trying to 100x that money. They are trying to ensure that 10B doesn't go to 1M or worse to zero. The amount of risk you can take dramatically decreases with the increase in the amount of money you manage, which is why Berkshire is sitting on nearly $150B in cash and so is Apple. There are not that many less risky options to deploy 10s of billions let alone 100s.
belter 3y ago
"Warren Buffett: Why Diversification Is Bullsh*t" - https://youtu.be/gKH5sQXpVCk https://youtu.be/gKH5sQXpVCk
oh_sigh 3y ago
Except that billg would have had much more control over MS if he hadn't diversified, meaning MS would have made different decisions, and maybe not have been as successful if he stayed active in it.
rldjbpin 3y ago
Given how much money he has dedicated to philanthrophy, regardless of reasoning, I am sure he is happy with the wealth he continues to have. Also, hindsight 20/20, and you might see the diversification play out more in the future once the AI bubble bursts. for instance, see the farms he owns https://news.ycombinator.com/item?id=27451374 https://news.ycombinator.com/item?id=27451374
ectospheno 3y ago
Isn’t this just a variant of the same train of thought that spawned "Most gamblers quit right before their big win"?

majani 3y ago

On the other hand Munger said that diversification is for those who don't know what they're doing. So maybe Gates wanted to stock pick and Buffet talked him into diversifying safely

OJFord 3y ago

Ok, now imagine a concentrated holding by founder of something like WeWork, or a fallen giant of yesteryear (especially wrt inflation / opportunity cost by comparison to some broad index). For every formerly concentrated investor who would've done well to stay concentrated, there's tonnes who did and shouldn't have, or didn't and would've suffered if they had.

episteme 3y ago

It still could have been the best decision at the time. Imagine you bet on a coin flip landing heads. After it's flipped and lands heads it's not useful to say you should have bet your net worth on it.

graton 3y ago

Tell that to the Enron employees who had all of their retirement 401k in Enron stock. Yes of course if someone is able to pick the exact stocks that will go up the most then they will do wonderful. The problem is that it is impossible to know which stocks are going to succeed or fail. Also the Bill & Melinda Gates foundation is estimated to be worth $69 billion. And probably most of that has come from Bill Gates.

cheonic720 3y ago
> The problem is that it is impossible to know which stocks are going to succeed or fail. Yet casinos make money despite not knowing the outcome of each game. You only need to be correct more times than you are wrong (in $ space, not number of trials).
- mckn1ght 3y ago
  Casino games have known probabilities, so the expected value can be used to project long term earnings. The more games people play over time, the more their projections will converge. Nobody knows the odds a company will profit or lose money or by how much, or if they will go bankrupt, merge with or acquire another company, experience hostile takeover, scandals, be mistaken for the wrong ticker symbol like Zoom, become the target of meme gamma/short squeezes like Gamestop, become the target of antitrust investigations, etc.
  - cheonic720 3y ago
    > Nobody knows the odds a company will profit or lose money or by how much, or if they will go bankrupt, merge with or acquire another company Do you think companies randomly decide merge? Do you think antitrust investigations are random? The SEC flips a coin every morning? The markets are proven to be NOT efficient. Now, for retail traders like FAANG SWEs, the markets are practically efficient.
    - ben_w 3y ago
      Indeed. I was thinking the other day about how a perfectly efficient market would have no profit, and thereby demonstrate the exact same absence of incentives that is often used to argue that state-owned businesses and service providers are bad for the economy and "we" shouldn't have them. I was going to lead with "if you have some insider information and can use it without being charged with violating insider trading rules, you can do better than most", but that seemed more pertinent. Buuuuut you also have people who hear the magic words "won the 1997 Nobel Memorial Prize in Economic Sciences", turn their brains off, bet everything on a misunderstanding, and after a few good years suddenly find that all the money evaporates everywhere at the same time. This is relevant to the quoted passage: > Nobody knows the odds a company will profit or lose money or by how much, or if they will go bankrupt, merge with or acquire another company (Also, is it my imagination/pure coincidence, or are you the same person creating a lot of new accounts that each has only one or two comments?)

rockbruno 3y ago

Why "be careful"? Yes, he could have made more money, but he would also be risking losing all of it. The purpose of diversification is not to make you more money, it's to reduce your risk of losing everything. It worked as intended.

tutfbhuf 3y ago

"In 1999, his fortune was almost three times that of Buffett, who was the second-richest person at the time. That year, Gates’s wealth surged past the $100 billion mark" I just ran a backtest[1] of Microsoft (MSFT) vs S&P 500 (SPY) starting in 1999 with $100 billion (dividends reinvested). MSFT would have resulted in $1.7 trillion, and SPY in $600 billion. Given the significantly higher risk of investing in MSFT versus SPY, I think SPY would have been the better choice nonetheless. Moreover, MSFT only started to perform stronger since 2016, before that, SPY was ahead of MSFT most of the time. [1]: https://www.portfoliovisualizer.com/backtest-portfolio#analysisResults https://www.portfoliovisualizer.com/backtest-portfolio#analy...

jeffybefffy519 3y ago

Sounds not true because Buffet has specifically said not to diversify in shareholder updates.

senko 3y ago

If your friend wasn't trolling and genuinely believed this advice, they have a very poor understanding of risk, and it would be beneficial to them to research it a bit (by which I don't mean click-driven youtube or tiktok influencers). To be fair, risk, diversification and other important financial concepts are not intuitive and are not taught (in a simple and intuitive way) to people although they're essential to majority of people in well-off societies. In a nutshell, this is a great example of survivorship bias. Yes, with perfect future information, Bill Gates could've been much richer. So would I, and I would only need the winning lottery numbers! Lacking this crystall ball, Buffett's advice was (and remains) correct. Also note at the utlity aspect - as a purchasing power, $1.33T and $138B are the same, and the only meaningful difference is to keep some kind of score. You can buy basically anything that's for sale, burn it to the ground, and still remain filthy rich (recently proven by Musk's acquisition of Twitter, on which he spent around $23B of his own money, according to quick web search).

jraby3 3y ago
Charlie munger and buffet are famous for not diversifying very much. They deeply research companies and then buy them long term. Currently half the Berkshire portfolio is in apple. Also bill gates probably wants to change the world for the better with his assets and has done so repeatedly. So the trillion dollar difference probably would have had a huge positive impact on the world.
- candiodari 3y ago
  I don't understand where this Berkshire reverence comes from. Buffet didn't become rich through stocks. His accomplishment is to stay rich by investing, primarily in insurance contracts, and it does look like that is a good way to summarize Berkshire: it's a backend investment fund for his insurance business. It makes his large insurance contracts a lot more competitive. And about that part, he's very tight lipped. He invests well, but he's hardly the only one, and Berkshire would not work without the backend insurance business generating the amounts of funds he has to invest in the stock market. So all of his advice is mostly pointless, unless you have 100 billion lying around. I'm saying: if you want to beat Berkshire financial performance, they key to that ... is not investment. Which is the great con Buffett pulls. He shows large amounts of money and a very prudent investment strategy, and with that attracts funds to run his insurance business. NOT the other way around. This is the central component of a huge insurance business: you need a LOT of money, available as capital, to run it. To be fair, I've never heard of him lying about this either, but he's not exactly forthcoming with this information. He also does remarkably little investing with the time he has. Clearly he's spending the vast majority of his time on his insurance business, not his investment business.

d1sxeyes 3y ago

If that is indeed true, then Bill Gates must be kicking himself for losing all that money. Drinking his champagne. In his hot tub. On his yacht in the mediterranean.

HenryBemis 3y ago

Between 138bn with high degree of certainty/low risk and 1.33tn (or bust) with single-stocks, I'd take the 138bn any day. And to change the scale to k/m, I'd take 138k that I know will be there at my old age, than a coin-toss 1.33m (or bust). Diversification is to (overall) lower your risk and sleep better at night. Otherwise investing solely in single stocks, you could as well go to the races and bet on Land Cookie (an imaginary offspring of Sea Biscuit). EDIT: hindsight is (always) 20/20.

that_guy_iain 3y ago

Hasn't Bill Gates spent a large part of his wealth? And has been doing so for 10-20 years?

pi-e-sigma 3y ago
LOL, you fell for it

break_the_bank 3y ago

Apparently Steve Ballmer didn't diversify like Bill Gates did and he will soon over take Bill when it comes to networth if MS keeps going up.

al_borland 3y ago
Imagine what he’d have if he actually helped Microsoft while he was CEO.
- deezleguy 3y ago
  I’m no fan of Ballmer by any stretch, but Azure was launched under his watch and is why MS is doing so well these days.
- pyrale 3y ago
  It seems Ballmer was memed to death, but he did actually do a lot of the hard, transitional things that allow ms to shine today. Thinking of the developers speech meme, and reflecting upon how microsoft became a significant OS pillar, developed VScode and the LSP protocol, bought github, etc - and looking at the significant subsequent rise of devrel roles, it seems like his vision was 20/20, regardless of the delivery.
  - al_borland 3y ago
    Ballmer left Microsoft in early 2014. VS Code was first released in 2015. The collaboration for LSP was announced in 2016. GitHub was acquired by Microsoft in 2018. It seems like these are Nadella’s successes. Someone else mentioned Azure, which is the division Nadella ran before taking over as CEO. It seems he was likely the key there as well. Meanwhile, during Ballmer’s time at the helm, the stock price was flat the entire time, all growth was under Gates and Nadella. Ballmer famously missed modern smartphones and attempts to course correct all failed, to the point that they gave up. Xbox started under Ballmer, but it’s been reported that it has lost $3b over the last 10 years. When he took over Windows had control of nearly the entire desktop market, when he left it has dropped significant with Apple now holding about 20%. People no longer believe Windows is required to get work done. And when looking at all operating systems, Android is about to surpass Windows, if it hasn’t already. He was giving a company with an overwhelmingly dominant position and left his successor with an uphill battle for mainstream relevance. It’s crazy when people talk about FAANG, there is no “M”. I think that is due to Ballmer’s mismanagement during the entire era which gave rise to these companies. Ignoring all the memes, I think he did a bad job. At best, he kept them in the game enough to give Nadella a chance for a recovery, which has been going well.

vik0 3y ago

https://nitter.net/nntaleb/status/1743935809877671957#m https://nitter.net/nntaleb/status/1743935809877671957#m :)

jjallen 3y ago

If this isn't the perfect example of "hindsight is 20-20" I don't know what is.

stavros 3y ago

After Bill Gates became friends with Warren Buffett, I chose to not diversify my Blockbuster-heavy portfolio by buying Microsoft shares. My $138 is worth $1.33 today.

al_borland 3y ago

Once you’re already rich, the goal is no longer to maximize upside at all costs, it’s to remove the risk from the table to so the fortune can sustain you the rest of your life. Microsoft could have just as easily fallen apart once Gates left the company and never recovered. Ballmer was a really bad successor. Even if Gates left money on the table in hindsight, his investments are still growing faster than he can give it away.

gchokov 3y ago

What if Microsoft shares went to $0? Diversification is risk management, not optimisations of returns in the sense you present this.

hef19898 3y ago
Well, there were people actually holding Gamestop...

nkrisc 3y ago

> Bill Gates' fortune today is 138 billion dollars, if he hadn't diversified it would be 1.33 trillion dollars. The only difference between those numbers, in terms of net worth, is how much you can give away.

Ekaros 3y ago
And one might also question how much of that money can be given away and how much that would actually affect the price. You can not sell stock valued that high endlessly.

MangoCoffee 3y ago

you can say that now but you don't know that at the time and this is about risk management. who can say at that time that Microsoft will shoot off? Microsoft under Steve Ballmer's era is a great company. Microsoft made a lot of money selling software and yet its stock price was never over $20+. Microsoft's stock price took off under Satya Nadella. however, there's too much unknown to bet on Satya Nadella. what if Ballmer never retired? what if Satya Nadella got a better offer from another big tech? what if Microsoft picks a different CEO than Satya Nadella?

refurb 3y ago

Now do all the losers.

RickJWagner 3y ago

Buffet has given mixed signals on this. On one hand (and I think the strongest hand) he has endlessly endorsed low-cost index funds. But on the other hand, he has been known to scorn wide portfolios as 'de-worseification'. He himself picks a handful of companies after much analysis (and does very well at it, of course). For anybody that's not Warren Buffet, diversification is a great idea.

bombcar 3y ago
He always endorses index funds for people who do not spend their entire life doing the stonks and even for most who do. Berkshire itself is basically an index fund of Buffet’s index. What he’s most strongly arguing against is managed funds where people “sell the ability to beat the market” which is bullshit.

deepGem 3y ago

This is all in hindsight. When you are looking forward, with that kind of money, you have to certainly think about risk and diversify. That said, Bill Gates was more or less left with no options but to sell some MS shares. Almost all founder CEOs do this, 1 to de-risk their wealth and 2 to also perhaps to reduce exposure to scrutiny. Whoever is sitting on 10B is not trying to 100x that money. They are trying to ensure that 10B doesn't go to 1M or worse to zero. The amount of risk you can take dramatically decreases with the increase in the amount of money you manage, which is why Berkshire is sitting on nearly $150B in cash and so is Apple. There are not that many less risky options to deploy 10s of billions let alone 100s.

belter 3y ago

"Warren Buffett: Why Diversification Is Bullsh*t" - https://youtu.be/gKH5sQXpVCk https://youtu.be/gKH5sQXpVCk

oh_sigh 3y ago

Except that billg would have had much more control over MS if he hadn't diversified, meaning MS would have made different decisions, and maybe not have been as successful if he stayed active in it.

rldjbpin 3y ago

Given how much money he has dedicated to philanthrophy, regardless of reasoning, I am sure he is happy with the wealth he continues to have. Also, hindsight 20/20, and you might see the diversification play out more in the future once the AI bubble bursts. for instance, see the farms he owns https://news.ycombinator.com/item?id=27451374 https://news.ycombinator.com/item?id=27451374

ectospheno 3y ago

Isn’t this just a variant of the same train of thought that spawned "Most gamblers quit right before their big win"?