Microsoft Corp. (NASDAQ: MSFT) Chairman Bill Gates -- net worth: $59.2 billion -- is no longer the world's wealthiest person. According to the HeraldSun, Mexico's Carlos Slim -- net worth: $67.8 billion -- now sits in that throne. In April, Slim surpassed Berkshire Hathaway Inc.'s (NYSE: BRK.A) CEO Warren Buffett as the world's second richest person. And today, Slim surpasses Gates.
How must Gates feel? I don't know. He has commented in the past that he doesn't think about being the world's wealthiest person much. But he has occupied that throne since 1995. After 12 years, there could be a twinge of regret at having lost the crown. But Gates still has plenty of money, particularly since Buffett contributed a huge chunk of his fortune to Gates' foundation.
Meanwhile how did Slim climb so fast? A 27% surge in the share price of America Movil (NYSE: AMX), Latin America's largest mobile phone operator controlled by Slim, from March to June enabled Slim to surpass Gates by $8.6 billion. The 5.7% increase in Microsoft stock in the second quarter was no match for the sharp rise in valuations of Slim's companies. He also owns shares of Telefonos de Mexico (NYSE: TMX) up 11% and Grupo Financiero Inbursa S.A. (MXK: GFINBURO) up 20%.
While I don't have earnings forecasts to evaluate Inbursa, it's not too late to consider buying in to Slim's other companies.
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American Movil. AMX's PEG of 1 -- based on a P/E of 26.2 on earnings growth of 26% to $4.22 in 2008 -- looks reasonable to me.
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Telmex. TMX's PEG of 2.5 -- based on a P/E of 12 on earnings growth of 4.9% to $3.31 in 2008 -- looks expensive to me -- I'd avoid this one.
It's not every day that a king gets dethroned. The market is sending a signal that might be worth heeding.
Peter Cohan is president of Peter S. Cohan & Associates, a management consulting and venture capital firm. He also teaches management at Babson College and edits The Cohan Letter. He has no financial interest in the securities mentioned in this post.
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Reader Comments (Page 1 of 1)
7-03-2007 @ 12:03PM
Michael Schneider said...
A list and description of Carlos Slim's Latin American Holdings is available free along with a just posted item on his philanthropic ventures in the (yellow label) Billionaire Watch at http://www.Barrelomoney.com. An interesting character, Carlos Slim recently made some big investments in US phone companies when they were out of favor- they are now back in vogue and Carlos Slime has fat profits there and probably also helping to catapult him to first place in the richest man in the world contest. The vintage item on his phone investments is at http://www.Barreloworld.com.
7-03-2007 @ 1:56PM
Frank said...
So what if this Sim guy is wealthier; what has he done for his society? He's a nobody until he does good for his country and people. Bill Gates is GREAT...I think he should lead our country in the oncoming term after President Bush.
7-03-2007 @ 6:42PM
Slyoldawg said...
This affects my day to day life how?
7-03-2007 @ 6:46PM
Slyoldawg said...
I really would like to know why this news is important and how it affects the day to day lives of people struggling to make a living.
7-03-2007 @ 7:23PM
williLnd said...
WHO CARES THESE PEOPLE WERE BORN TO BE RICH .I AND 2BILLION PEOPLE CANT EVEN PAY THEIR RENT THEIR MEDICAL MEDS,PAY FOR THESE GAS PRICES,I HAVE A MASTERS from COLUMBIA UNIV.A PHD,AND MORE CREDENTIALS AFTER MY NAME I KNOW WHAT TO DO WITH>BY COMPARISON I PAY MORE TAXES THAN ANY OF THESE PEOPLE.I AM ALL IN TEARS FOR POOR LITLE BILL GATES,BILL AND HILLARY THEY ARE SO POOR ,OH OH,.AMERICA WERE THIEFS AND LIERS TRY TO BE PRESIDENTS,GOD BLESS HYPOCRACY AND AMERICA,WERE ITS A PROVEN FACTOR AMERICA IS IN EMOTIONAL CRISIS,PUT A DEMOCRAT IN THE WHITE HOUSE AND WORKING PEOPLE WILL SUPPORT ALL ON PA MEDICAID FOOD STAMPS AND SSI.GOD BLESS THE WORKING PEOPLE.!
7-03-2007 @ 7:45PM
henry mcpeak said...
so what !!who gives a darn.
7-03-2007 @ 11:08PM
Superman said...
Bill Gates NEVER had to work to earn his so called money...his father gave him the business and all the money he needed in 1975! Read the beginning of 'Bill Gates The Road Ahead'. Its nice to see him go down! I HOPE he's sick!
If I was Bill Gates I would give 2/3rds of all my money out of my own pocket to help poor people (and STILL LIVE COMFORTABLY), not play economic games giving a couple million here and there over many years that he again gives for NOT working for! And what a hypocrite he and his company are!! They scare you with confusion games and lawyer written EULAs that only his lawyers can understand... Practice what you preach oh Sir William Gates III! lol. Will the Queen deknight him?...lol
...And Warren Buffet gave him BILLIONS to his Charity 'the gates foundation' which is a joke compared to how much he could give!! ...And he gives hardly ANYTHING out of his own pocket! Its pennies to him...No MOST is 'our own money' we make the differences up in paying for his taxes and astronomical prices in his business software and unreliable, hacker targeted operating systems software...grrr... Lets see if its true the bigger they are, the harder they fall...lol
7-04-2007 @ 8:57AM
Lynn said...
Really makes "Slim" a hero, someone to be proud of for what??...pitiful!!!
7-04-2007 @ 9:12AM
Superman said...
By comparison 'Slick Willie' is NO Hero!! At least Slim built up companies that were hurting!! Bill Gates takes companies that are hurting and instead of boosting them, runs them over like a Pirate, TYCOON Style! NO hero is a TYCOON!!!
7-04-2007 @ 11:58AM
superSLIM said...
FRANK at comment 2 is an asshole..he is the typical amercian whos doesn`t know shit and talks about everything... SLim has helped poor people from the street for as long as I can remember, He donates money to poor kid`s schools, scholarships, donates computers, helps malformated kids.