I recently came across this list of the world’s richest people between 1987 and 1989:
The obvious takeaway is Japan, which makes up 60% of this top 10 list. As we know, the late 80s marked a massive asset bubble in the country that seemed to be creating unprecedented wealth and affluence — and the ability for the Japanese to buy trophy real estate around the world — but then collapsed in 1990.
Another interesting name on this list is Paul Reichmann. Those of you in the real estate industry may know that Paul Reichmann and his brothers, Albert and Ralph, founded a development company in the 1950s in Toronto called Olympia & York. It was the outgrowth of their Olympia Flooring and Tile Company.
Olympia & York developed First Canadian Place in 1975, the World Financial Center in Battery Park City, New York, in 1985, One Canada Square in London in 1991 (the tallest building in the UK at the time), and became the largest property development company in the world in the 1980s — hence Paul’s spot on the list.
But now here’s this same top 10 list for 1992:
The Japanese are far less prominent, and Paul is no longer on the list. Olympia & York filed for bankruptcy in 1992, and by the following year had been broken up. It’s a reminder that when we’re talking about the world’s richest people, we’re talking about paper equity tied to market cycles, rather than cash sitting in a high-interest savings account.
Market dynamics trump individual performance, or to put it another way, it’s a lot harder to be a genius when the market turns against you.
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