Westwords
Just when I thought the world economy was looking up, the boy genius managing our conservative stock portfolio for continuing retirement happiness in Mexico sent a sad e-mail.
He said “we” had lost 2 percent in an unexpected series of divots, dives and mini-disasters.
The “we” part is a joke. He drops a dollar in commission and I start double-checking the price of tacos.
This was a very discouraging development until I recalled what happened to Carlos Slim one Friday afternoon. A market adjustment cost him $478,000,000.
The more I thought about it, the more I felt for him instead of me. Carlos was left with only $73.3 billion.
The richest man in the world is one of Mexico’s many amazing contradictions. From one point of view, he is a predator, taking unbelievable profits from the poor and poorer.
From another perspective, he is a gracious philanthropist who funds charitable causes and thousands of college scholarships. He has provided many, many pairs of reading glasses, 294,755 bicycles to children who live far from their schools and two or three times that many medical operations for poor people with health problems.
Carlos even built a museum that offers free admission. His latest thing is translating Khan Academy online classes into Spanish. He didn’t say how much that was going to cost, just that he would pay for all activities in Mexico.
He tossed in four billion pesos to set up virtual libraries and put more schools on-line.
Contrary to rumor, Slim does not own all the cacti in Mexico. He is diversified. He is heavy in telecommunications, banking, restaurants, construction, drilling and airlines. Being a sharp guy, he is less invested in the New York Times.
He is also a visionary. He actually advocates infrastructure improvements that don’t necessarily connect to his businesses.
He sees no problem with monopolies so long as they generate jobs. He favors greater productivity and greater rewards for his many employees, the nation and the world.
You are absolutely correct, Slim is making more progress than most of us but there is a potential hurdle on the horizon. The new government is talking about telecommunication reform. An astronomical fine is pending. That might be inconvenient but probably not enough to bump Slim from Number 1.
You want perspective on how big is big? Once upon a time, Marcus Crassus’ wealth was supposedly equal to the entire treasury of the Roman Empire. It took the earnings of 32,000 Romans to match his annual return.
John D. Rockefeller came along a little later and did much better, racking up an annual income equal to 116,000 Americans.
Wall Street bankers have prospered and Silicon Valley geeks became the temporary rich. Some who plundered Russia made a mint and outran the multitudes.
Carlos is a bigger moneyman than any of them, bigger than several added together. His annual intake is said to equal the earnings of an incredible 400,000 Mexicans — plus those of us who use TracFones.
The Slim success story did not start at zero. His father, Julian, as a teenager in 1902, left Lebanon for Mexico. He gambled on Mexico City real estate during the revolution and came out with what was then a fortune.
Carlos inherited one-sixth of that wealth in 1952. Older siblings guided him. He became a shrewd turnaround specialist. He bought companies that were about to go broke, imposed better management and generally got richer.
I do believe his best move was being friends with president Carlos Salinas de Gortari.
Carlos Slim and associates took advantage of Carlos Salinas’ privatization program and won ownership of Telmex in 1990. I have heard there may have been irregularities in the bidding process but we gringos are not allowed to stir around in Mexican politics.
Some considered it a miracle when Slim somehow made Telmex functional. He invested in modern equipment. It became possible to get a phone line and actually make phone calls. Yes, rates went up to pay for progress. Telmex became a gold mine.
I remember when Forbes magazine said Slim was worth a mere $15 billion or so. In two years, he took a giant jump, from 20 to 60. He passed Bill Gates and Warren Buffet as if they were parked.
Slim saw the future. He was quick into cell phones and internet and maybe a hundred other opportunities. There was a report that his finger was in 200 pies. He said that might not be precise, that he had lost count of his varied businesses.
There once was a restaurant in Mexico City that advertised “not owned by Carlos Slim.”
Some have said it is difficult to live a day without contributing to Slim prosperity. That said, he has generally invested wisely.
We do know he spends some pesos on lawyers. Sometimes they have to win legal battles. Rivals have tried to rein him in. Governments wanted to impose regulations. Slim said it was mostly misunderstandings.
Slim has purchased good public relations. Remember his first digital education program? He was going to give away thousands of low-cost laptops. Libraries would lend them to youngsters as they do books. Hmmmm.
The PR people did an excellent job promoting the museum. They didn’t even mention the commercial development that was part of the $800 million project. It includes Sanborns, Inbursa bank and iShop. All forward pesos to Slim.
Slim, 73 and not slim, is a case study in contradictions. He says competition stimulates business but he opposes competition on a regular basis. He talks technology like an expert but does not use a computer. He owns part or most of three soccer teams but roots for the New York Yankees.
Those who like him say his personal life is restrained. He might even be called thrifty. Those who don’t like him see a symbol of a Mexico sickness, greed and the awful gap between the haves and have-nots. A United Nations study and the new president say Mexico is much too near the bottom in economic equality. Too many people earn barely enough to survive. This supposedly stymies national growth.
Carlos Slim wants you to know this is not his fault. He says he invests more and more in Mexico each year, building things. One big water treatment plant may create 100,000 jobs. Amazing.
Carlos and I understand progress. We are in perfect agreement on the economic outlook. His wealth is guaranteed to grow. Modest holdings in the West portfolio remain at risk.