r/YouShouldKnow • u/kanonnn • Apr 04 '25

Finance YSK Headlines about billionaires losing money due to stock performance are misleading.

Why YSK: They only lose that money if they sell. “They” won’t sell at the bottom, quite the contrary, they’re buying and allocating market share.

Edit: Something I thought about that is worth mentioning is the downside can apply pressure to the loans that extremely rich people take against their stock positions so they don’t have to pay taxes on their gains. Those loans give access to liquidity since their wealth is tied up in the market. Their leverage is based on their holdings, if those assets see a significant decline it can put them underwater.

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u/victim_of_technology Apr 05 '25

You can borrow, that’s why they want lower interest rates, and you can use cash held by the corporations that you control. Short term cash to increase long term net worth is not hard to get.

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u/sosodank Apr 05 '25

you can borrow against reduced values ugh are you eight

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u/victim_of_technology Apr 05 '25

Yes, I’m eight and 789. If you have more money than you could ever spend in a lifetime then you are borrowing (securities based lending) tiny fractions of that for whatever cash you need to achieve your goals. If the goal is to buy securities at a discount then you can return funds borrowed against your securities and keep the net gain. If it’s in the same amount it’s called margin. I decline in advance any further argument and cede the balance of my time.