After giving away $28 billion, Bill Gates is no longer the third-richest man in the world. He’s the second-richest.

You read that right. Despite his considerable, praiseworthy charity work, the Microsoft cofounder is getting wealthier. In 2012, he wound up $7 billion ahead with a net worth of $63.4 billion, according to Bloomberg’s Billionaires Index…

Bill Gates has been aggressively selling down his Microsoft position for over a decade. Early on, this looked like a smart idea just on the basic tenets of diversification alone. But when he didn’t stop at 50% of his net worth, and went all the way down to the point where Microsoft was only a piddling 20% of his net worth, you could argue that this was more than just diversification.

Somewhere along the line, this massive and ongoing liquidation became a short-sale of his old friend (and current Microsoft CEO) Steve Ballmer. And it looks to have been a smart “trade”.

What triggered it? Was it the borderline breakeven profitability of the XBox after so many years of investment? How about the flaming wreckage of Microsoft’s internet properties and search game? Maybe it was the launch of the Zune ecosystem that wasn’t? Or perhaps he decided to sell more aggressively the day when Ballmer mocked the iPhone and mentioned that his kids were forbidden to own one.

Maybe it was just the cumulative effect of these embarrassments or missed opportunities – one after another. Either way, Gates’s sales have gone far beyond any kind of diversification that we’ve seen with the Google whiz kids or Larry Ellison over at Oracle. While the billionaire has remained almost completely silent on Microsoft’s loss of luster and standing, his trading activities have spoken volumes…

Joshua Brown ends his piece with an admonition to diversify. The body of the article says a lot more.

Steve Ballmer hasn’t a clue!



  1. MikeN says:

    That is silly. He diversified, he never actually made a short sale. Holding tens of billions in Microsoft stock is not a short sale.

    • sargasso_c says:

      Yes.

    • Cap'n Kangaroo says:

      I’m not really sure what the author is talking about.

      Google “short-sale” and the result is a real estate term for selling a property for less than the outstanding liens against it but the difference is forgiven by the lien-holders. A short sale is an alternative to foreclosure.

      Selling short is a securities term for betting that the investor can replace some amount of stock at a lower price at some time in the future. The investor profits from taking the short position but takes the risk of having to replace the stock at a higher price.

      But Bill Gates selling off stock he owns with no intention of replacing it in the future has no relationship to selling short. And I see no real estate analogy in this.

      And Bill Gates holding 20% of his fortune in MS stock means he is still highly invested in MS and has A LOT further to go to be diversified. Even at 5% he would still be tied to Microsoft.

  2. Dallas says:

    He still can’t break an Obama Trillion dollar coin.

    • MikeN says:

      First, it may be legal to mint a platinum bullion coin with a $1 trillion face value, but it’s not legal to pass it off as actually worth $1 trillion if there isn’t $1 trillion of platinum in it. That’s because it’s a bullion coin and not a legal circulating coin.

      • Dallas says:

        I would think that if it’s backed by the Fed, it’s worth a trillion. Really, this ‘coin’ would never leave Ft Knox ANC is purely symbolic, right?

  3. t0llyb0ng says:

    Just wondering.  Nobody’s ever mentioned it.  Why should it take two weeks for anyone to “get used to” Windows 8?  Wasn’t there one genius at Microsoft that could have come up with a 10 minute interactive tutorial to cover the handful of techniques the public was pining for, that might have made it easy?  Apple did just this years ago to help folks transition to the Mac world.  Run MAC BASICS & you were on your way.  (I never took ‘em up on it but it was there if I wanted to.)

    If Win8 is a clunker it’s because of MS’s failure to convey how to use it.  Way to go, Ballmer.

    Win8 is not for me anyway.  I don’t want a tablet.  I don’t want to touch my screen.  I want NOT to touch my screen.

    • spsffan says:

      Good points. I don’t want to touch my screen either. It gets finger prints on the screen. And, besides, I am perfectly content to type on a real keyboard, though satisfactory examples of them are getting rarer.

      Heck, although I’ve gotten used to the new MS Office etc. way of navigating, I still think that the XP versions with drop down menus were far easier to use.

      As for Bill Gates, he’s just a very, very savvy businessman.

      • Jack Mehoff says:

        I’d guess you don’t like books much either. After all, you have to use your fingers on those pages.

        Or could it simply be a conditioned response where you don’t really even know why you dislike it?!

        • spsffan says:

          My fingers don’t leave smudges on the pages of books. And, with a book, once I read the page, I’m done with it so, even if smudged, it doesn’t matter.

          A glass screen is another matter. Even clean fingers deposit skin oils. I learned way, way, way back, to keep my hands off windows, mirrors, lenses, etc. It’s just common sense.

          Not to worry though. In a few years, I will be surrounded by illiterates* anyway.

          *Since the are discontinuing the teaching of cursive writing in the schools.

          • Hmeyers says:

            Although this does sound a bit like a paradox, I’ve seen tons of tablets used by children — likely the dirtiest fingers with all the chicken nuggets and nose pickings — and even with heavy use you don’t notice the smudges generally except if the tablet is off and getting some natural light (usually the smudges are not visible in indoor lighting).

            So the irony is the smudges are true, but tend to be hard to see.

            Like how a television screen or monitor does accumulate dust but it can take a long time for it to become noticeable.

        • Chris Mac says:

          And when I buy a book.. I read it and pass it on to the next person, for free.

  4. dadeo says:

    Selling a pc oriented business in the post pc era seems like a smart move to me – really a no-brainer.

  5. Admfubar says:

    bill isnt diversifying, he’s wholesale dumping stock in a dying corporation, bill has known about m$ dying for years.. he’s putting that money into his next pyramid scheme.. and this one has tax free returns..

  6. msbpodcast says:

    Bill’s money is making its own money for Bill because that’s what money does in the hands of thousands of smart people (smart, not wise, but smart.)

    As long as Bill has enough money to hire lots of smart people (smart, not wise, but smart,) it can be expected to do so … until the fiscal volcano explodes and buries all of those smart people, (smart, not wise, but smart) under tons of rich, fertile volcanic loam … waiting for the next bunch of fiscal farmers.

    Oh, by the way, the 12,400 billionaire land owners will still own the land. (Right now several states worth of acreage are in the hands of six billionaires.)

    The farmers, tied to the land as they are, are the ones who are going to get buried. The land owners are much more mobile, and all on their own properties.

    These properties remain their own properties as long as they remain wise and don’t try to be smart about it. When they try to be smart, there are wars and revolutions to force the change of hands on the property.

    That explains the existence of a whole bunch of ‘Stans and a whole bunch of African countries. If ever they get united under one locally owned house, like Mullah Omar’s caliphate* or Mugabé’s, watch out for that war. Its going to get real ugly and spread far and fast.

    *) Why do you thing we went to war in Iraq and Afghanistan in the first place?

    It wasn’t because of the world trade center. (We kill more people and destroy more property than that every year just getting them to and from home and work.)

    It was because that was where there was control of land, and the riches under it, to be had.

    The caliphate was, and in the case of Iran it still is, specially interesting and worrisome, because a theocracy’s succession has rules but the 1%ers in a theocracy are interchangeable when the head doesn’t exist.

    It N. Korea was sitting on some interesting mineral deposits, we’d already be at war with China for them.

    • msbpodcast says:

      You might want to lookup serfdom if you want to se where the economy is going.

    • Cash McCall says:

      Could you limit your discussion to just one conspiracy theory at a time. It is a little hard to follow the dots but if you keep at it I am sure you can tie it all into the JFK assassination coverup and Jimmy Hoffa’s disappearance.

  7. Somebody says:

    The look on Gates’ s face is priceless.
    He must have been thinking about how to sell his Microsoft shares to buy Apple.

    • Cash McCall says:

      I think Gates is sleeping or Ballmer is hypnotizing him with his famous double claw whammy!

  8. MikeN says:

    The Microsoft bashing gets tiresome. While you are out playing with various OS, Microsoft gets the job done. In terms of security, Microsoft Windows is superior to MacOS, Linux, Android. That is not my opinion, but that of the US military which is buying millions of Win 8.

    • Cash McCall says:

      Oh yes… endorsed by the US Military… Is that the same organization that couldn’t launch a single armed aircraft on 9.11; not a piper cub with a pea shooter? Yeah that’s the Trillion dollar military at its bureaucratic best. Maybe if they had been using another OS, they could have mounted a response.

      And by the way, I have never met a genius that was career military. In fact, they are professional buck passers and completely useless when it counts. 9.11 is a perfect example of why American citizens should never trust the Gov or expect it to function. So their endorsement of Windows 8 speaks for itself.

  9. JimD says:

    I wonder when M$ will finally give “Uncle Fester” the HEAVE HO !!!

  10. Cash McCall says:

    Every time I see MSFT drop below 27, I think the stock is cheap. Then I look at Ballmer and think… that’s the cheapest polyester Kmart suit I have ever seen; this stock can go much lower.

    Ballmer is worse than nepotism. He is nothing more than a placeholder that has been instructed to keep this pile of junk together at all cost instead of breaking it up and spinning value to the shares. Instead they have missed every trend in the last ten years, overpaid for every acquisition and continued to make more cumbersome products year after year leading up to Win 8 which sets the high bar for cumbersome.

    As for Gates and Buffett. Great… send your money out of the USA and buy all the mosquito nets you can. The more Africans that will survive the mosquito the more that will die from starvation. The history of Liberal African do gooders has always been the same. Rich doesn’t imply smart.

    Some places on earth just can’t be fixed. I find it astonishing that Gates and Buffett have the unmitigated arrogance to claim sainthood based on this silly gesture. In the end, the mosquito is humane death compared to the additional deaths by starvation. Please leave it to the mosquito. The mosquito is Africa’s best friend not those smiling shark heads belonging to Gates and Buffett.