Beyond having more money, billionaires simply invest differently from you and me because they have very different goals and objectives.
One particularly loathsome example I recall involved a news release about then-CEO and founder Michael Dell buying $70 million worth of Dell stock. At the time, Dell was the fourth-richest man in the U.S., with net assets of about $20 billion. Dell’s server business was under assault from Hewlett-Packard, along with weak retail marketing and “enormous quality problems”; the stock had taken quite the beating after the tech bubble popped in 2000, and it never quite recovered.
While $70 million sure sounds like a lot of stock, to a $20 billion dollar portfolio, it is a meaningless pittance -- it’s a third of a percent or so. To the investor with a million-dollar home and a $3 million-dollar portfolio, it’s the equivalent of buying 100 shares of Apple. Is it possible that Michael Dell, with his namesake company under intense pressure, had a different agenda than mere capital appreciation?
The bottom line is that billionaires can and do make specific investments for reasons that have nothing whatsoever to do with saving for a house, putting together a college fund for their children, or making sure they have a financially secure retirement. At times they are propping up a weakened company, creating a personal legacy or stroking their own egos. Their different objectives likely mean that following their trade recommendations may not work out well for you.