Yesterday someone posted a video and it had a classic capitalist propaganda argument that if Jeff Bezos massively liquidated his Amazon stake he would end up with less money than the current valuation of it. Which of course means that the stake is less valuable than it's valuation.

Why do these people never look at the opposite case though? Say you end up with the money ammount of Jeff Bezos Amazon stake in your bank account and you try to get the same stake as Jeff has now. As soon as you massively start buying up Amazon shares, the price is going to sky rocket. After you use up all of your money, you will probably have less than half of Jeff's shares. And at this point the value of his stake would double too. Same logic but opposite conclusion.

Now you may think that we haven't proven anything here, right? But which scenario is actually the realistic one? As far as I know total stock market liquidations happen only in one case and that is if the company is going to shit. But corporate takeovers through stock market are incredibly common.

  • Pezevenk [he/him]
    ·
    4 years ago

    If it was just a matter of how many consumer products you could buy, it would be meaningless because after a certain level of wealth which is lower than a billion, you can buy any quantity of consumer products you could realistically want.