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Comment by pchristensen | Hacker News Reader

Not a huge fan of Slim based on what I've heard, but I mostly agree with him on this. Makes me wonder though, what he's doing holding on to tens of billions in wealth if he could be building businesses and creating jobs for the poor instead. It makes it sound like "Business is better than charity, but I'd rather just be rich"

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Rich in irony as well -- Slim's purchase of Telmex, the state-controlled telephone monopoly, meant that he could stifle competition and charge exorbitant rates. That's pretty much as far as you can get from encouraging employment for the poor.

Not to mention the purchase was allegedly laden with government kickbacks and various forms of corruption.

“Purchase” is a pretty rich description, too. Slim paid an obscenely low price for Telmex – it was making $1.1 billion yearly profit, and Slim’s company paid less than $900 million for a 10% stake, which money came from loans Slim got on letters of credit (i.e. it wasn’t even his own money). Telmex was and is a near monopoly, with the kinds of monopolistic pricing that goes along with that.

Basically, Slim’s fortune is made on a corrupt business deal with the corrupt president of the time (Salinas) who he was buddy-buddy with, followed by gouging the Mexican citizenry on phone bills for the last 2 decades. (Salinas’s PRI party made out well too, as Slim gave lots of money back to them over the subsequent years.)

I really don’t think he’s in any position to talk about charity.

> Slim paid an obscenely low price for Telmex – it was making $1.1 billion yearly profit, and Slim’s company paid less than $900 million for a 10% stake

So he paid $900 million for $110 annual profits? So a P/E of around 8? That's not an obscenely low price, especially if they already had complete market share and premium pricing. The only way to go from there is down, and it's a high capital business that'd most like need lots of capital improvements to stay competitive. For comparison, AT&T is trading a 12 times earnings, but that's in a much more healthy and stable market than Mexico.

I guess getting a 10% stake at 8 times earnings is an okay deal, but it doesn't jump out to me as a great deal. Would you be excited to buy a stake at that price in a high capital Mexican business with no growth potential because it's tapped out? I wouldn't.

No growth potential? Yearly profits proceeded to shoot up by like 200% over the next several years.

Are his billions in cash, or is his net value based on stock holdings, private investments, etc.?

Does it matter?

Presumably it would affect the amount he is actually able to immediately use to support those in need.

He's the richest man in the world. He has enough liquid assets to aggressively pursue charitable giving if he wants to.

I doubt many people would question that he has significant liquid assets, I was just pointing out the relevance of the question. For a business owner on his scale, I'd imagine that the vast majority of his wealth would be tied up in business ventures.

I would assume his net value is mostly invested in public and private companies.

I suspect that a large fraction of his money is invested in various businesses and not just under a mattress, so maybe that's his way of helping.

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