[jmh530]

The wealthy disproportionately have their money invested in equities. The ultra wealthy are also typically highly concentrated in specific companies, think Jeff Bezos and Amazon. They tend to lose more when the market crashes.

[richardknop]

The wealthy are able to wait out recessions without having to panic sell their equities and in the end they become even richer because inevitably the bull market that comes after the crash will make them come out on the top. All the while collecting dividends. Working class people who don't own equities don't gain anything from bull markets such as the one that's been going on for last 10 years.

[cm2187]

I am not sure that's the case. I read that when you look at the top billionaire list through times (80s, 90s, 2000s, now), there is a lot of turnover. Over long economic cycles, the fate of the companies that made people rich can evolve in both directions.

[orthecreedence]

Let's say I'm a billionaire. There's a market crash. A lot of my money is tied up in the market, but luckily, a lot of it isn't. A lot of it will be safe investments or shares in profit-generating companies that issue dividends. So, while the commoner is destitute, while I may have lost 50% of my wealth, I have safe money (and passive income) I can use to pour into the market buying post-crash cheap investments. Also, because my cost of living is minuscule compared to my income, I don't have to panic-sell during the crash.

When the market bounces back four years later, I'm now 1.5x wealthier than I was before the crash (thanks to all the cheap investments), and all I had to do was move some money around.

[richardknop]

Don't forget that wealthy people also own a lot of real estate and are rentiers so they have plenty of passive income sources to easily cruise through a recession while buying up cheap stuff which will go up in price heavily once economy gets back on track.

[ceejayoz]

High turnover at the very top isn't shocking - there'll always be new ones like Zuckerberg and Bezos shooting up as new markets are found/created.

There's a big difference between "no longer richest person in the world" and "lost everything".

[gryfft]

Yes, they lose more. They lose proportionally less. They're not winding up on the streets. It's disingenuous to pretend that it has anywhere near the impact on their lives as it does the other 99.9% of the participants in the economy.

[almost_usual]

They definitely can end up in the streets. Some of the wealthiest people suffered the most during past crashes, most killed themselves before taking the streets. Read Devil Take the Hindmost.

Edit: I’m not going to search through this book to find sources that fit some criteria you’re looking for. Get off HN comments, read a book, and learn some financial history lessons.

[gryfft]

I haven't read it, but I have a feeling we're not talking about the same people. I'm not talking about successful investors and millionaires. I'm talking specifically about net worth north of $200M in today's dollars. Not the people who jumped from their windows during the Depression. The ones who bought their stock and waited it out.

Edit: I've now read a few reviews and summaries of Devil Take The Hindmost. Its subtitle is "A History Of Financial Speculation," and it appears that its subject matter is not focused on ultra-wealthy persons with diversified portfolios being ruined by market corrections, but specifically speculators and frauds. At a glance, it doesn't look particularly relevant to this conversation.

[almost_usual]

Some of the _wealthiest_ people in modern history have lost it all. A recent example is Eike Batista.

[gryfft]

Batista is currently under arrest and has been sentenced to 30 years in prison for bribing disgraced Rio de Janeiro governor Sérgio Cabral, in order to secure public contracts, according to Wikipedia[0].

I'd prefer an example that isn't somebody who wound up in prison.

0. https://en.wikipedia.org/wiki/Eike_Batista

[almost_usual]

Read the book then because I’m not going to search through it to cite a rich person who lost it all that fits your changing criteria.

[Frondo]

I would like to know of one ultra-wealthy individual who ended up possessing nothing and was made homeless; I don't intend this to be callous but while committing suicide is a tragedy but it does't mean some rich person was going to end up homeless. Being homeless means you're at a point where no one can or will take you in, and I have a very hard time imagining a hedge fund billionaire in that position.

[DataWorker]

The poor rich people “who suffer the most” is a great point ironically. Loss is harder for those who have never had to face it.

[almost_usual]

Honestly this is why I never want to be wealthy or even rich. Living middle class with a roof and food is plenty.

[geggam]

Odd isnt it ?

They can declare bankruptcy and be free from all debt whereas your average college student cant escape.

Should we expect to see students jumping off of buildings soon ?

[scottlocklin]

IMO schools should stand surety for students. Would solve many, many societal problems by putting their skin in the game, rather than using government subsidized loans that can't be defaulted.

[navigatesol]

>They lose proportionally less. They're not winding up on the streets.

Yes, but the implication of OP is that these ultra-wealthy are crashing the system so they can then buy up everything around them. Where is the data to support this? The rich suffer during a recession too; no one is claiming they end up on the streets.

[zaro]

> Where is the data to support this?

Have you checked the Oxfam reports? When you take a look at the last years, there is very clear trend. If it continues like this probably in few decades the richest one percent will own as much as the rest 99%.

[gryfft]

>The rich suffer during a recession too;

I believe we're thinking of different definitions of the word "suffer." The qualitative difference to which I refer is that for one class of people, the "suffering" is restricted to numbers on ledgers going down, and for another class of people, said suffering can literally involve ending up on the streets.

Furthermore, someone else in these very comments is claiming the ultra-wealthy can wind up on the streets as a result of market forces.

[engineeringwoke]

Debt is usually involved. That makes your calculus a little naive

[ceejayoz]

They tend to be able to wait out the crash, though, and be in better position to take advantage of the recovery.

[cimmanom]

Unless they get bailed out