Why the 1%Will Continue to Broaden the Wealth Gap

I recently came across the graphic below,  it illustrates why the top 1% are where they are. I know Amazon sells everything to everybody, but over $200,000 of sales a minute? Wow. Just consider if every company depicted could monetize each transaction for say, just a penny each? Do the math. Warning: you need to understand exponential numbers as your calculator probably doesn’t handle enough zeroes on its display.

In our hyper-charged world of politics, the top 1% are vilified by many. But the founders of the firms below represent a good part of that list. Many provide services that are free to the user. How do you regulate that? NetFlix provides a service for a fraction of their cable competitors. They are rich, not because of gouging their customers, but because the internet has created a massive market that we could not have imagined 20 years ago.

Volume can work in reverse too. What if Amazon’s margins decreased by a penny a transaction? That is the risk with such high volume companies for the average investor. A tiny hiccup in earnings can cause a massive sell off in stock price. Go back and follow the stock price of a few companies during the tech wreck.

Here is the direct link to The Visual Capitalist with a clearer image.



bill@401advisor.com • 937.434.1790

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Charles H. Dow Award Winner 2008. The papers honored with this award have represented the richness and depth of technical analysis.


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