Why are billionaires like Elon Musk and Mark Zuckerberg selling off shares – and should you do the same?

Wall Street is agog. Jeff Bezos, Mark Zuckerberg, Leon Black, Jamie Dimon, the Walton family.

That’s a roll-call of American business greatness. What unites them, apart from their vast success and wealth, is that they have chosen this moment to sell shares in their businesses.

They’ve got investors asking: “What do they know that we don’t?” And not just in the United States: that’s a five-star Davos list. If they were to join each other on stage at the World Economic Forum, delegates would be queueing around the block to bag a place.

They all run businesses that are doing phenomenally well. This is not a fire sale, nor are they offloading a few shares. The numbers being sold are massive.

Bezos has sold 14 million shares worth $2.4bn (£1.9bn), taking his recent sales in Amazon to 50 million. Zuckerberg ditched $500m worth of Meta stock. The Walmart-owning Waltons sold $1.5bn of shares.

Some have selected this moment not only to sell stock, but to do so for the very first time. After 34 years at private equity firm Apollo, Black has disposed of $172.8m-worth of shares. Likewise Dimon: the JP Morgan boss has raised $150m from selling shares in the giant bank.

What is more, they’ve done so while the markets are up. The S&P 500 has climbed more than 27 per cent in the past year. Wall Street is in a buoyant mood. At least, it was, until news of these disposals filtered through.

They have become richer still in the last 12 months, but clearly they’re not prepared to hang around to become even wealthier. They will have their individual reasons for selling, but the fact is, they’ve all pressed the button pretty much at the same time.

It might not be a coincidence that, as they were debating making their move, and while their advisers were running the figures, the field for the US presidential election was narrowing considerably. It’s down to the same two as in 2020: Joe Biden vs Donald Trump.

Last time, the result was close, leading to discord, protests, rioting – even, arguably, an attempt to overthrow American democracy. Months of legal disputes followed. The same could well occur again.

What this brought about previously was uncertainty: economic activity slowed; everyone was playing wait and see. These business stars and their legions of expert advisers know above all that the markets cannot abide uncertainty. They’re not prepared to take a chance, so they’ve gone.

They could, too, be taking advantage of tax breaks introduced by the Trump administration.

It might not only be America that concerns them. This is a record-breaking election year across the world. Some 49 per cent of the global population is heading to the polls, as at least 64 countries, plus the European Union, choose their next leaders.

It will be a hugely significant year, one of the most vital in history, as domestic and international politics are reshaped. Those super-rich are not ready to hang around: they want to cut and chase – and at least put some of their stock into cash, for safekeeping.

The comfort for the rest of us is that they’ve not shed all their shares: only some. They still have plenty remaining on the shelf. So it could be viewed as a vote of no confidence, but only a partial vote. They remain very much in charge; they still have plenty of skin in the game.

There may be another aspect to the timing: that they’re unwinding before the tech bubble bursts. Tech stocks, especially in the US, have enjoyed stratospheric gains in the past 12 months. So it could be that they’ve decided, separately, that it cannot continue – they’re all well placed, with their tech-heavy businesses, to form a considered view – so they issued the “sell” order.

They may feel that the market is overheated and is continuing to overheat, as investors climb on board for fear of missing out. Knowledgeable insiders, on the other hand, take a more dispassionate view, and they’re not going to sit and wait for the inevitable fall.

Zuckerberg’s Meta is up 186 per cent, Dimon’s JPMorgan shares have risen nearly 30 per cent, and Bezos’s Amazon is also trading 90 per cent higher. These are close to record highs.

Like the best of gamblers – but arguably the rarest – they know to quit when ahead.

Where does this leave the average punter? Well, there’s no doubt that the world is set for a period of turmoil. We’re already there, with wars in Ukraine and Gaza, the high cost of living, inflation that stubbornly refuses to shift, and higher interest rates. To this list can be added: US upheaval as Biden and Trump slug it out, possible opposition in Russia and China as the two countries hold national elections, fear of a Chinese attack on Taiwan tied to an election, the rise of the right, the ongoing impact of the climate crisis, and the danger of another pandemic.

Best to take a leaf out of the billionaire’s playbook, sell some holdings, and enjoy the profits immediately. Keep the rest. Don’t be surprised if none, or some, or all of these events materialise.

Follow this stellar bunch and be prepared.