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Citation: Forbes Oct 13 1997, v160, n8, p148(2)
Author: Conlin, Michelle
Title: When billionaires become a dime a dozen. (includes related
article on criteria used to determine the Forbes
400)(Forbes 400) by Michelle Conlin
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COPYRIGHT 1997 Forbes Inc.
FIFTEEN YEARS AGO we started compiling these lists of the 400 richest
Americans. In 1982 we identified 13 Americans as billionaires. This year we
count 170 billionaires. Over the same period the price of admission to The
Forbes Four Hundred has quintupled, to $475 million.
It would seem that wealth is following a sort of Moore's Law of its own.
Intel's Gordon Moore predicted that silicon power would double every 18
months. If wealth isn't compounding at that rate, it certainly is growing at a
faster clip than at any other time in history. Last year, on average, Bill
Gates' net worth grew by an astounding $400 million every week. Michael Dell's
net worth increased fivefold, to $5.5 billion.
But computer magnates aren't the only people benefiting from the Silicon
Revolution. As we report elsewhere (see p. 98) people in businesses far
removed from computer making and designing are building success by applying
computers to mundane businesses.
Financial services entrepreneurs also made big gains, backing up Peter
Drucker's claim that the retail end of finance will become increasingly
important. This year we add three newcomers from that field: Sanford Weill of
the Travelers Group, Richard Strong of Strong Capital Management and Julian
Robertson of Tiger Management.
Irene Pennington, at 97, becomes the oldest new member in the history of The
Four Hundred. And one of the feistiest, too. Nine months before the death of
her husband, oil baron Doc Pennington, the nonagenarian took control of the
family fortune, promptly fired his cronies and smartly reinvested his $600
million, much of which was thought to have been languishing in local checking
accounts.
Though the stock market boomed and technology soared, economist Joseph
Schumpeter's rule of creative destruction still prevailed. The very factors
that made new enterpreneurs rich swept older entrepreneurs from their perches.
"Some of the wealthy can't stand success," says original Silicon Valley
seed-money man Arthur Rock. "They squander away their assets with bad
investments." Thus 43 of last year's 400 were put out of the club this year.
Of 1982's original 400, only 106 remain on the list.
Membership seesaws, too. Rock himself fell off the 400 in 1987 but returns
this year, largely on the strength of his Intel holdings. Also returning,
thanks to Walt Disney Co.'s compensation committee: option- supercharged
Michael Eisner.
When he announced that he planned to give $1 billion to United Nations
programs, media magnate Ted Turner said he was deliberately demoting himself
on the list. Until we see the exact color of Ted's money, however, we are
leaving our estimate of his wealth at $3.5 billion and leaving him in 28th
place. If he really does fork over $1 billion in cash or stock, he'll drop
down to the 55th spot.
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