MUMBAI, INDIA – October 16: Amazon CEO Jeff Bezos along with American newscaster Lauren … [+]
The $ 13 billion rise on Amazon
However, Bezos’ net worth is well below its peak. Based on the decline in Amazon’s stock price, which peaked at around $ 3,344 on July 10, Bezos has experienced a $ 12.2 billion non-monetary decline in his net worth.
I think investors should try to understand why Amazon, which as of July 21 had fallen 6.2% from its peak, and other large-cap tech stocks have fallen from their July 10 highs.
The short answer: A powerful group of investors is selling shares of large tech companies, as news of the progress of Covid-19 vaccines spurs optimism that brought down the shares of companies dependent on social density.
(I have no financial interest in the securities mentioned in this publication.)
Amazon’s shares have undoubtedly suffered less than other large tech companies. From its peak around July 10, Netflix
Bezos’ net worth increases 8% on July 20
Social media is buzzing: putting ‘Jeff Bezos’ in second place for “what’s happening” on Twitter on Wednesday morning.
That strong position stems from a report that Bezos added $ 13 billion to his net worth: Amazon shares increased 8% on July 20, “Within 24 hours Amazon shares continue to rise amid the coronavirus pandemic “wrote the Independent
Bezos has not been as charitable as other wealthy people. the Independent He noted that Warren Buffet has donated about $ 34.5 billion to charities since “he promised to donate his entire stake in the company” and that the Bill and Melinda Gates Foundation has donated $ 46 billion to charitable causes.
Compared to them, Bezos’ 2018 fund to donate $ 2 billion to education programs for homeless people and a 2020 commitment to contribute $ 10 billion to tackle climate change seems like a thin beer, according to the opinion of critics. Independent.
Why are Big Cap Tech shares down since July 10?
Although Netflix’s downfall is based on something tangible, i.e. a mixed earnings report I wrote is a buy opportunity, there has been no compelling explanation for the sale in these large cap tech stocks. Jim Cramer described the drop as “profit taking,” CNBC reported.
He also referred to the decrease in those actions as a relief for stress. “We needed a break. The market cannot go up every day without some vendors leaving the carpentry. However, this is exactly the kind of pullback I’ve been waiting for, so we have to use this moment to regroup and uncover the next market move, ”according to CNBC.
Here’s another guess as to why large-cap tech stocks have been affected since July 10: The good news about Covid-19 vaccines makes a powerful group of investors sell big tech companies and buy shares of companies. Dependent on social density, including cruise ship operators, airlines, hotels, concert hall operators and clothing retailers, which have lost value due to the global quarantine aimed at curbing the pandemic.
Consider the rise in the shares of these social density dependent companies on July 15 when Moderna published positive news about its Covid-19 vaccine candidate in the New England Journal of Medicine.
As AP reported that day, “Royal Caribbean Cruises
Meanwhile, an analyst hinted that investors may be moving away from large-cap tech stocks that benefit from the Work From Home (WFH) economy.
The news caused the Russell 2000 small-cap index to “jump 3.5%, a change from the previous months when big tech-oriented companies were leading the market,” according to AP.
CFRA chief investment strategist Sam Stovall said: “It is not just the gigantic tech stocks that are likely to drive share prices up, but small and mid cap stocks will also benefit, not just from an economic recovery, but also very low interest rates, “said AP.
That was bad for WFH winners like “Clorox
What should investors do?
If this theory is valid, I hope that the WFH winners will come up with any negative news about the Covid-19 vaccine, while actions dependent on social density fall. And the good news about Covid-19 vaccines should have the opposite effect.
But it would ignore these short-term fluctuations and focus more on whether companies exceed EPS and revenue growth expectations while raising guidance above what analysts forecast.
If Amazon surpasses and rises on July 30, when reporting second-quarter results, I expect Bezos’ net worth to exceed his record.
