A
new reality has come to the stock market:
The founders and leaders of the flashiest companies listed on the stock
market don’t give a damn what their stock does.
This may be good or it may be bad, but them’s the facts, and you should
be aware of them.
Amazon
reported disappointing earnings today, and the stock promptly tanked 10
percent. Do you think Jeff Bezos cares? Do you think the founders of Google or Facebook
or Alibaba really care if they or their key employees are worth a few hundred
million less than they were a week ago?
They do not, and, as I say, that may be a good thing – as long as you
understand the fact.
Years
ago, when I was serenading Wall Street, it used to be different. People left
big companies to join start-ups on the promise of wealth that would eventually be
realized via stock options. Today, a hot company goes public and - wham! – dozens of new millionaires or
billionaires are minted overnight, and if years later the stock drops 10 percent
in a day, Jeff Bezos, Mark Zuckerberg, and Larry Page and their top lieutenants
are still very, very wealthy.
Given
that reality, how should you invest?
Personally, I don’t invest in Amazon or Google or Facebook or Alibaba,
though for many investors they have been great investments. It’s just that I
like my companies’ leaders to have skin in the game. Mind you, I don’t expect the CEO to be a
pauper; that would be unrealistic. But I do want him or her to care what the
stock does, just as I care.
I
have nothing against great wealth. God bless Bill Gates and the others on the Fortune list. The opportunity to make unlimited wealth is
one of the qualities that has made the United States the most powerful nation
on the planet. I devoutly hope that the CEOs of the companies I invest in will
make billions and billions. But by then I will be long gone, looking for the
next batch of billionaire wannabes.
