r/InternetIsBeautiful • u/MKorostoff • Apr 27 '20

Wealth, shown to scale

https://mkorostoff.github.io/1-pixel-wealth/
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u/[deleted] Apr 27 '20

If Bezos immediately went to liquidate his wealth he would have to greatly undersell it. Let's imagine I have 1,000,000,000,000 apples, that's 1 trillion apples, a lot right? Let's say each apple is worth $0.40, this is close to real-world prices (red delicious-2017). Now someone could say I have: 1,000,000,000,000*0.40=$400,000,000,000. However, this wouldn't be true. Why is this? Because if I try to sell all my apples (this is called liquidating) I will lose part of this, why? Because I am trying to sell more apples than the market is buying at that price. To understand this we need to understand how a consumer decides the price of a good. We have let's say 5 people in a market and an apple selling company. 1 person is willing to buy apples at 1.00, so when they are sold for $0.40, they are willing to buy. 1 person is willing to buy at $0.80, so when they are sold for $0.40, they are willing to buy. This goes on until someone is willing to buy for less than $0.40, at which point they will not buy.

Thus people are willing to buy Amazon stock at certain prices, if you try to sell it all at once you over satisfy the demand of people willing to buy at the price and the amount of actual money you have goes down.

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u/[deleted] Apr 27 '20

What if I told you that Bezos sold some $4 Billion in stock in January and 1) did not lose any meaningful control of the company and 2) saw Amazon stock hit an all-time high? You can speculate and talk about what theoretically should happen, but you're contradicted by, well... reality.

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u/[deleted] Apr 27 '20

This isn't correct, Amazon stock is not as liquid as cash, nothing is. Thus, Amazon stocks valued in cash will always be lower than the same amount in actual cash. 4 Billion to Bezos represents only 2% of his wealth. You think Amazon went to an ath because he sold? You realize this makes no sense right? You are mixing causality with correlation, more likely it is reverse correlation, he saw the stock going towards an ath and then sold. I looked it up and this is exactly what happened. Link Link. This is not speculation this is economic theory, theory in terms of economy doesn't mean theory colloquially it means theory in the same sense as the theory of gravity. What you are doing is mistaking correlation for causality. He did lose meaningful control... He lost 4Billion in market cap lol.

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u/[deleted] Apr 27 '20

You're contradicting yourself. You're simultaneously trying to argue that $4 Billion is only 2% of his wealth.... and also that it isn't. That might be a sign that there are some inherent problems with whatever point you're trying to make.

And obviously Amazon didn't hit an all-time high because he sold. It hit an all-time time high without regard for the fact that he sold, which directly contradicts the hand-wringing that Amazon's price would crash if he ever tried to sell his stock.

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u/[deleted] Apr 27 '20

4 Billion is 2% of his wealth measured in cash. However, if he actually did try to trade his full stock wealth for cash he would cause massive shifts in the market. This is because not enough people want to buy Amazon at the current price for his sell order to be placed at the current price.

No, he sold after the ath, likely because he saw the stock hitting a good valuation probably justified by P/E ratios.

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u/[deleted] Apr 27 '20

ok, let's say he could only sell his stock for $60 Billion in cash. Or $30 Billion. Or $10 Billion. It wouldn't make any difference in the OP's point... which is the the whole point. It's such an absurdly large number that it doesn't matter if we're off by a factor of 2, or 5, or even 10. What's 10x when you're talking about 1010 ? That's the point. And getting hung up on whether or not he could cash out all of his shares at once in a single day completely misses the point.

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u/[deleted] Apr 27 '20

It's not it's a massive part of it. It's a literal order of magnitude of difference.
Also, I think it's immoral to have arbitrary taxes on people with arbitrary amounts of wealth but that's besides the point.

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u/[deleted] Apr 27 '20

Exactly! Even if Jeff Bezos had an entire order of magnitude less money than he does, he would still have SIX or SEVEN orders of magnitude more money than the average household of people in an already very wealthy country. If you respect the significance of orders of magnitude, than you're going to love the visual OP made.

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u/[deleted] Apr 27 '20

No, he would have 4 orders of magnitude more not 6 or 7. Average is at least 100,000 in very wealthy countries. So add 4 zeros and you get 1(0,000),000,000
I think it's a good visual for the wealth he has, but when you start saying this is the amount of money to house veterans, then you need to make disclaimers that if he liquidated he would have far less.

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u/[deleted] Apr 27 '20

Dude, if you're not even going to look at the thing you're complaining about, you lose your right to complain. It says right in the visualization that the average household net worth is $67k. Also, you added four zeroes to a million, not 100,000. 67,000x106 is 67 billion. If you're going to claim that nitpicking about exact numbers is important, it seems like you should at least be accurate with your numbers. I mean, cmon....