Friday 4 September 2020

Apple bigger than the FTSE100

That is quite some going for the old fruit farmers. 

Apple of course is hugely successful company, able to sell its over-priced wares all over the world to willing consumers such as myself. 

But bigger than the FTSE100, Apple bigger than say HSBC, BP, Tesco and Unilever put together?

Of course there are reasons here, the US markets are on a roll but the nexus of investment in just a few stocks is a new phenomenon. In past decades the US system would have moved to break-up monopolists like Google or Microsoft, certainly Facebook and Amazon would not survive a real Anti-Trust investigation.

However with an Election year, Republican President and worries about US pre-eminence no such action is forthcoming. 

So instead 70% of US Equity value sits in literally a handful of companies. All I know is that this is unsustainable and not a reflection of value in the real world....but the markets can remain wrong for a long time before reality bites. 

Perhaps it really is different this time?



hovis said...

The market can remain irrational longer than you can stay solvent etc - to be fair have we had a rational market, at least in the sense of fundamentals (rather than the wider philosophical debate) for at least the last 12 years or so?

Concentration of value means all efforts political and otherwise are made to make sure it doesnt fall.. bit like the great British Housing bubble(s)?

Graeme said...

Vix is looking interesting. Tesla and apple look due for a collapse. But what would that mean for Nasdaq as a whole?

Graeme said...

And... How we would you define the alleged monopolies of the fanmags? Where is amazon's monopoly, for example? It might be different stateside but food, books, CDs goods etc are not subject to predatory pricing by amazon in the UK

Nick Drew said...

@ Tesla ... due for a collapse

Yes, Tesla is interesting. I'd say Amazon & Google & Apple (and, I suppose, even FB if you need such products) are delivering something genuinely useful

Tesla is, however, purveyor (very successful, thus far) of a faddish con - even if EVs will be part of the future

like Blackberry was

E-K said...

I'm into music and would love a home (computer) studio but am crap on computers. For simplicity, the way I've been told to go is Apple; its initial cost is high and you are forced to upgrade all the time (according to friends.)

They obviously have a good business model - get people into a good system then make their computer programmes obsolete in short time.

The world has missed out on some great musical ideas because of this. Instead you have me trapping off here every day.


DJK said...

The FT has been dropping hints that Tesla is the next Wirecard. I wouldn't know, but the valuations do seem insane.

Your starting comment that Apple are bigger than the FTSE 100 seems to have been overtaken by the latest correction.

BlokeInBrum said...

There are plenty of places online which have been banging on about Tesla and their financial shenanigans for a long time. Elon takes great pleasure, I'm sure, in burning the short sellers on a regular basis.
Do a search for Tesla on the Streetwise Professors blog for a more in depth analysis of what has been going on there.

I think when Trump wins again in November that there is going to be a great realignmennt with many of these mega companies. There is already an ongoing anti-trust investigation against Alphabet(Google) and I think that many others will follow.

Amazon, Facebook, Apple and many others have become effective monopolies in their respective areas of business. That cant be healthy in any free society.

The argument is that they can go out of fashion just as quickly as they became popular.

I think that there is a qualitative difference this time around. The likes of Google and Amazon have so much market heft now that I think a startup would find it impossible to compete. I think most people are also ignorant about the sheer scale of these companies and the depth and extent of their business and political connections.

If the U.S. government was on the ball then this situation should not have occurred in the first place. No company should be allowed to become greater than ( insert arbitrary percentage here ) of the market. They should have started with Microsoft many moons ago, and continued on.

CityUnslicker said...

Blokeinbrum - well said.

graeme - Amazon Web Services.