Are You Smarter Than A Billionaire?

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Are You Smarter Than A Billionaire?

There's an old show called So Are You Smarter Than A 5th Grader? where parents and their 5th grader had to guessed it...questions from 5th grade tests on different school topics.

Here's a few sample questions:

  1. What is "oz" an abbreviation for?
  2. Which one of these is a mammal? A seahorse, sea lion or sea urchin?
  3. If a car is going 40mph and travels 190 miles, how long will it take? 

How'd you do? Since I know you want to know, the answers a 1) ounce 2) sea lion and 3) 4 hours 45 minutes.

Statistically speaking, most people suck at those. So when it comes to questions of economic policy, inflation, geopolitical conflicts, supply and demand, and capital investments...are you smarter than a billionaire?

Stupid Millionaires Exist

I've met some stupid millionaires. No joke. They were just doing one thing really well and struck gold. Sometimes literally.

In fact, in a lot of situations, being stupid helped them because they were ignorant of the risks and went for it anyway. Most people quit before they ever start. Ignorance is bliss.

But as my wife had a hard time comprehending the other night over a glass of wine, a billioniare is a millionaire ONE THOUSAND TIMES.

There are no stupid billionaires. NONE. Are there corrupt, delinquent billionaires not fit to babysit my 5-year old and twin daughters for a few hours? Absolutely. But that's different.

Mark Cuban owns the Dallas Mavericks and is a favorite on the TV show, Shark Tank. He said that if he had to start over from zero right now with everything he knows, he would 100% be a millionaire again. But he highly doubts he'd be a billionaire again. It takes too much time and involves too many factors outside your control.

Follow The Smart Money

I sold off most of my stocks in December 2021 and January 2022. If you look at the charts, that's before things got really bad. Am I a genius? A prophet? Do I consult the greatest investors of all time like Warren Buffett and Ray Dalio? 

Maybe...I mean, no one has ever seen me and Batman in the same room together so I could be the Dark Knight as well. 

My point is this. I knew this because Elon Musk, CEO of Tesla and SpaceX, and Jeff Bezos, then-CEO of Amazon both sold their own company stock! THAT'S A BIG DEAL.

So why would they do this? There's a few reasons but few of them are good. And when you combine that with the general headlines of rising inflation, a government continuing to print money (making inflation worse), conflict overseas with Russia-Ukraine and more, I assumed they weren't selling because they wanted a 2nd superyacht. 

It's because they knew it was going to get bad. Okay. Cool. Good enough for me. I sold.

Since that happened, Amazon stock is down 30% and Tesla is down 46%.

How To Follow The Smart Money

A time consuming but thorough way to do this is to read investor reports of publicly traded companies. These billionaires have to announce when they sell since its a significant company event and is mandated by financial regulations. 

But if you want to follow some helpful geeks that do it for you, I use these sources to keep abreast of rich people making big moves.

It's worth noting some of these are government officials. This may shock you, but our highest government officials are SHOCKINGLY good at picking stocks since we for some unknown reason don't have a law stating they can't (a clear conflict of interest).

I'll say it one more time because it's worth mentioning, not ALL times a mega-rich person is selling is a good idea for you too as well.

Maybe another investment needs cash and have to sell to move money.

Maybe they have to pay off judges and media to be kept out of scandals like Jeffrey Epstein's list.

Maybe they do need that 2nd superyacht. 

But when its a lot of rich and powerful people selling at the same time, all I know is one thing...I'm not smarter than a billionaire.

So I'll just do as they do and live with the results.

Until our paths cross again...

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