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May 04, 2006

Losing money ... big time!

Read last weekend that Bill Gates lost $3 billion(US!) in one day, as a result of the collapse in Microsoft's share price. Microsoft lost something like $32 billion in one day when investors marked down its share price. The reason? Because Microsoft indicated that it was prepared to take some short term pain for long term gain. All the while forecasting an increase in sales performance of over 10%! I wonder what that says about our expectations for wealth and its ability to satisfy?

The fact that Gates is worth more than something like the 30 poorest countries in the world highlights something of the challenge facing the world in terms of income distribution and access to basic life requisites. Bill and Melinda Gates have taken a substantial personal interest in health problems in the poorest countries and are making a substantial investment in addressing the challenge of Malaria, a disease for which there is no money to be made by pharmaceutical corporations, largely because the main sufferers are from these poorest nations. Over 3 million people are infected each year, of which about 500,000 die. When the Gates gave an initial donation of $30 million, the researchers were agog - it would multiply the amount of money available to researching the disease. Apparently the Gates give more money to foreign aid than the US government.

So, how does losing $3 billion in one day affect a guy like this? Well, apart from the fact that it was only a "paper" loss, it would diminish his wealth by about 2%. But then, with still over $40 billion up his sleeve, I don't think he'll have to change what he eats for breakfast - or where he decides to eat it.

Posted by gary at May 4, 2006 10:58 AM


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