by Gary Alexander

February 1, 2022

While visiting family over the Christmas break, I learned that the word “Growth” is a dirty word. I had been sending copies of my “Growth Mail” to family, but some wouldn’t open it since they associated “growth” with smokestacks, too much cheap manufactured “stuff” from China, and climate change.

I tried patiently to explain that Growth now means cleaner technology and services, better health care, and all the things we want – working from home, less commuting, and a better life. They were still skeptical, so I no longer use the words “Growth Mail” when sending out these columns to friends and family.

Something similar happened when I edited Wealth Magazine in the 1980s. It never caught on, despite riding the crest of a bull market. Many investors were ashamed to put Wealth on their coffee tables. It made their college-age kids wary of bringing friends over. Even in Ronald Reagan’s go-go 1980s, Wealth and Profit were six-letter “four-letter words” to those who called the 1980s the “Me Decade.”

Now, in 2022, Growth stocks are way out of favor, and even the two four-letter words “grow rich” are so out of fashion – and indeed slightly embarrassing – that TV programs are built around bringing down the rich. Let me profile two rich-bashing shows (one news; one fiction) I saw on TV last Sunday, January 23.

Program #1: CBS Sunday Morning’s Cover Story: “Should Wealth Have Its Limits?”

My first example was the lead story on CBS Sunday Morning News, usually a positive program amid the dismal Sunday morning chatter. Titled, “Should Wealth Have Its Limits?” this 8-minute lead segment began with Abigail Disney, granddaughter of Roy O. Disney, brother of Walt, who said she is ashamed of her inherited wealth and is now a social activist and documentary film maker critical of the Disney CEO’s salary. She is an advocate for employee activism, a noble cause but no real reason for critiquing wealth.

The core of the show’s arguments came from the Dutch Professor Ingrid Robeyns, who chairs the Ethics Department at Utrecht University. She argues that there should be an upper limit to how much wealth or material possessions a person may own, with $1 billion being “way too much” for anyone to own.

To support her proposition, called “limitarianism,” the program cited a “startling new study” (sourced to Oxfam), which stated that “the world’s ten richest people more than doubled their fortunes during the pandemic” while “the income levels for the 99% of people around the globe fell.” Could this be true?

While this statement is worded in a way that may be technically true, it distorts the truth in several ways:

(1) “Income levels” only refers to employed (“earned”) income, not counting the benefits of government programs to replace the lost job income. People forced out of jobs received income from other sources.

(2) More importantly, America’s middle-class grew their wealth through asset appreciation during the pandemic, due in large part to the wave of new money created by the U.S. Treasury and Federal Reserve. The bulk of that money went into real estate, the stock market, bitcoin, and commodities – you name it!

United States Home Price Growth Bar Chart

Graphs are for illustrative and discussion purposes only. Please read important disclosures at the end of this commentary.

(3) Also, the rich as a whole did not outperform the overall stock market. Oxfam’s wording selects the 10 biggest winners and ignores the bulk of the rich (who generally try to protect their wealth, not multiply it). The Forbes 400 performed less successfully than the S&P 500, as the following chart demonstrates.

Investment Performance of the Super Rich Bar Chart

Graphs are for illustrative and discussion purposes only. Please read important disclosures at the end of this commentary.

(4) As for 99% of the world getting poorer, this is the biggest lie circulating in the world today. All polls taken in the last decade find the vast majority believe that poverty is increasing, but the poor of the world are gaining in wealth and income by the fastest percent of anyone, leap-frogging into the middle class.

Share of World's Population Living in Poverty Bar Chart

Graphs are for illustrative and discussion purposes only. Please read important disclosures at the end of this commentary.

At the end of this soak-the-rich segment, CBS closed with a small slice of anti-rich bias with no real point: “In the 8 minutes this story ran, Jeff Bezos’ wealth increased $1 million.” I’ll put aside for the moment that, in the same 90-minute program, CBS profiled Architectural Digest and the “guilty pleasure” most people have in “seeing how the rich and famous live.” Double standard, anyone?

Here are the market facts – which CBS should know. In the week before this segment aired, Bezos’ Amazon.com stock fell by 12%. Jeff Bezos owns 55 million shares, which account for between 85% and 90% of his net worth, so Bezos’ wealth really wasn’t rising by $1 million every 8 minutes that week. Bezos lost over $21 billion that week, or $2.1 million a minute, or $17 million in those 8 air-time minutes.

Over the last year, Amazon.com is down about 17%. In the 2021 Forbes 400 issue, Bezos was listed as being worth $201 billion. According to Business Insider on February 2, 2021, Bezos was worth $196 billion, but he is worth $168 billion now. One Amazon share traded at $3,762 on November 17, 2021, and each share fell over $1,000 to $2,707 as of January 24, 2022, so Bezos lost $58 billion in 10 weeks.

Nobody feels sorry for Bezos’s big losses – and I don’t care much for his excessive lifestyle or what he has done to The Washington Post, or how he treated his employees when he was CEO – but CBS should admit that stocks go DOWN, too! We may not like what the super-rich do with their dollars, but we like quick delivery of books at half price, better electronics and cars, and better information delivered faster.

Program #2: The Season Debut of “Billions” – “Having $1 Billion is a Crime”

If owning $1 billion is unethical (according to the Ethics scholar in Utrecht), it is criminal in New York!

The second attack on wealth I witnessed last Sunday was the debut of Billions, in which New York’s Attorney General told a billionaire hedge fund manager that, “Billionaires break the laws of decency. By definition, having that much money is criminal.” The hedge fund manager he was lecturing basically agreed with him enough to “fire” some of his major clients who seemed to have made “too much money.”

“Criminal” Billionaire Image

Here is the core of the speech in which hedge fund manager Michael Prince “fired” his largest clients:

Let’s look at the prevailing feeling in this country about wealth. I think it’s largely right. Too much is concentrated in the hands of too few, but let’s not blame that on those who manage their wealth for them. Many of the wealthiest have misused their resources. Many have cut corners. We will not. In fact, we will not take their money. I’m not firing my employees. I’m firing you, my investors, which is why I’ve called you all in. We have checks drawn for your redemptions. Thank you for your business. Later, when you reach our new standards for ethics, perhaps we’ll meet again.”

–Money manager Michael Prince to clients, from Billions, January 23, 2022

The major flaw in this Princely sermon is that the 10 richest Americans nearly all built their fortune from scratch. The Fall 2021 Forbes Top 10 are, in order, Jeff Bezos, Elon Musk, Jeff Zuckerberg, Bill Gates, Larry Page, Sergey Brin, Larry Ellison, Warren Buffett, Steve Ballmer, and Michael Bloomberg. On the Forbes “Self-Made” index (in which zero = inherited money, and 10 = self-made), they average 8.0.

America’s super-rich got rich through their business, not through inheritance or passive investing. More than two-thirds of the entire Forbes 400 created their own wealth. By contrast, in the first Forbes 400 in 1982, about 60% inherited their wealth or came from rich families. By 2011, the inheritors were cut in half, to 32% (68% started their own business). This is wealth created from nothing, not taken from others.

Billionaire inventor Elon Musk has recently surpassed Jeff Bezos as the richest man in the world and was named Time’s 2021 “Person of the Year,” but Senator Elizabeth Warren isn’t impressed. She wants to tax the wealth of those “freeloading off everyone else.” In response, Musk tweeted back, “I will pay over $11 billion in taxes this year.” Yes, the rich continue to pay the lion’s share of all income taxes, and they also hire thousands of others, who pay taxes and contribute to the programs our politicians love to sell to us.

Growth is a win-win game, but the Big Win for the neo-socialists is that they are convincing us otherwise.

Navellier & Associates owns Tesla (TSLA), Walt Disney Co. (DIS), and Amazon.Com Inc. (AMZN) for a few accounts only all per client request in managed accounts. Gary Alexander does not own Tesla (TSLA), Walt Disney Co. (DIS), or Amazon.Com Inc. (AMZN) personally.

All content above represents the opinion of Gary Alexander of Navellier & Associates, Inc.

Please see important disclosures below.

Also In This Issue

A Look Ahead by Louis Navellier
The Fundamentals Still Apply, As Time Goes By

Income Mail by Bryan Perry
Income Investing Just Got Simplified

Growth Mail by Gary Alexander
Since When Did “Grow Rich” Become Four-Letter Words?

Global Mail by Ivan Martchev
January Reflects Powell’s Influence in the Stock Market

Sector Spotlight by Jason Bodner
When Will the Market Hit Bottom?

View Full Archive
Read Past Issues Here

About The Author

Gary Alexander
SENIOR EDITOR

Gary Alexander has been Senior Writer at Navellier since 2009.  He edits Navellier’s weekly Marketmail and writes a weekly Growth Mail column, in which he uses market history to support the case for growth stocks.  For the previous 20 years before joining Navellier, he was Senior Executive Editor at InvestorPlace Media (formerly Phillips Publishing), where he worked with several leading investment analysts, including Louis Navellier (since 1997), helping launch Louis Navellier’s Blue Chip Growth and Global Growth newsletters.

Prior to that, Gary edited Wealth Magazine and Gold Newsletter and wrote various investment research reports for Jefferson Financial in New Orleans in the 1980s.  He began his financial newsletter career with KCI Communications in 1980, where he served as consulting editor for Personal Finance newsletter while serving as general manager of KCI’s Alexandria House book division.  Before that, he covered the economics beat for news magazines. All content of “Growth Mail” represents the opinion of Gary Alexander

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