Billionaire On Covid-19

August 7, 2020

By: Hanson Feng

Investing is based on psychology and history with a minimal amount of finance being involved. From the inverted yield curve showing investor’s bearish perspectives on the market to stock markets predicting every election for over 30 years. 

Technology ETFs are up 28% since the pandemic was declared iShares NASDAQ 100 Index ETF (CAD-Hedged)

There are lots of winners and losers, from institutional investors like Mutual Fund managers to personal investors like you and me. Whether you’ve invested in highly lucrative companies that benefit directly or indirectly from the pandemic, you’ve benefited. We’re not just talking pharmaceuticals like Pfizer and Acasti. Consumer staple providers like Costco, Loblaws, and Johnson & Johnson have seen profits skyrocket since the beginning of the pandemic due to consumer panic. Technology stocks have also seen a jump, as investors bet big on consumer technology like Netflix, while companies pour money into work from home technology with companies like Microsoft and IBM. 

Collectively 10 Billionaires have gained almost $194 billion since the start of 2020 (Source: Bloomberg)

Not only have select investors seen a big payday, but the leaders and executives of large companies have seen big increases in their bank accounts. From Jeff Bezos’s $56.7 billion addition to his bank account since the beginning of 2020, we’re not talking small numbers. A year to date change in net worth as of July 1 is shown below: 

Jeff Bezos: +$56.7 Billion
Elon Musk: +$25.8 Billion
Colin Huang: +$24.7 Billion
Mackenzie Bezos: +19.8 Billion
Steve Ballmer: +$15.6 Billion
Mark Zuckerberg: +$11.8 Billion
Pony Ma: +$11.5 Billion
Qin Yinglin: +$11.4 Billion
Eric Yuan: +$9.53 Billion
William Ding: +$7.08 Billion

[Source: Bloomberg Businessweek]

Whether it’s Amazon’s skyrocketing revenue as retail shuts down to save lives allowing Amazon's market cap and stock price to skyrocket. Or if it's the widespread use of video conferencing software (Zoom). All of the biggest gainers have set up businesses that can thrive in good and bad economic situations. 

Opinion: it’s a tale of a free economy, allowing for creativity and prosperity. 

This will irk socialists, but this is a direct example of a free economy benefiting those who work hard. As a believer in classic liberalism, the debate to me isn’t about wealth inequality, but is rather about the equality to seek economic mobility. All of these people have prospered in a year of harsh economic, social, and political conditions through setting up organizations, ideas, and initiatives that pay dividends regardless of market conditions. 

This is a lesson to all investors not just entrepreneurs, including myself; the market is changing, technology and consumer basics will always continue returning in times of crisis, even as banks cut dividends, airlines are grounded, and consumer non-essentials go under.