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America's Biggest Company

Financial turmoil is a serious business, so it's with comic relief that I read about Apple's market capitalization becoming bigger than Exxon's for the first time. 'Who has the biggest market capitalization' is a far cry from being the official 'most important' company; still, it does say something about the financial zeitgeist in a loose and unscientific sort of way.



With all due respect to the Apple groupies out there, if Apple went "Poof!" tomorrow, it wouldn't affect life very much for many people. They would check the weather, get email, find a gasoline station, download trashy popular music, or keep up with the Kardashians by some other means.

But just try to imagine a world without Exxon or its rivals. Naturally gasoline is the first thing that comes to mind, but that is just the start. Compare the relative importances of saving a minute of your time by looking up the location of a gas station on your iPhone, with the availability of the gasoline in the first place. The latter must be 100 times more important.

Exxon affects your daily life in so many ways; yet most people don't think about Exxon at all unless it has screwed up. Still, I think it would be healthy to aim the imagination in that direction every now and then.

That Apple is bigger than Exxon shows how frivolous and detached from physical reality our post-industrial world has become. In some sense it makes the business world, the stock market, and economic "science" seem like an illusion.

Comments

Anonymous said…
There was a time when downtown Tokyo was considered more valuable than the entire state of California, and Japanese (at least one) considered moving to Washington D.C. because it was "cheap".

Tom in Orlando
Anonymous said…
I had the same reaction when I heard the comparison of Apple's market cap to Exxon's, even though I am an electronic engineer and readily give Apple credit for all the right things they have done with their products.

The question I have for myself is how I would know, and if I even have the courage to short Apple stock when it's time to do so.

Remember how Cisco had the world's largest market capitalization (>US$500B), and was "destined" to be the first trillion-dollar company? It was in 2000, not that long ago. Cisco has been doing well, but its market cap is less than $90B now.

NWB
Boonie said…
Tom, yes I remember the Japanese bubble of the late 1980s. It's weird the way they seemed 10 feet tall back then, but now we never think about them.

NWB, I too admire Apple's innovation, but I can't help poking fun at the groupie-ness of their fan boys.

There are always high flyers on Wall Street than I'm eager to debunk, but like you I hold back from selling them short, until it's too late of course!
Anonymous said…
In the early 60's, it was Avon, the Market Cap King, that is until women entered the work force in great numbers, Avon Ladies were legion. Cosmetic containers cost more than their contents, and Avon was the largest Cosmetics company. Their famous commercials, "Avon Calling", followed by the sound of a doorbell. Shifting demographics doomed that business model. "The sweet smell of success" was a famous line about the Company.

I guess I'm dating myself to reminisce about Avon.

Tom in Orlando
Anonymous said…
Boonie your too funny

I would guess if your phone, Internet,TV , computer & blog went dead and all that information was lost- deleted forever it would not effect you too much either !!
AND FOR GODS SAKE , let's not even think about the 800,000 Chinese people who build that crap :-)) or the 46,000 US apple workers. or the 100 million who own it.
Now your thinking like a TRUE Chinese leader ......
I wish I could give you the power of "Poof!"

Boonie said:
With all due respect to the Apple groupies out there, if Apple went "Poof!" tomorrow, it wouldn't affect life very much for many people. They would check the weather, get email, find a gasoline station, download trashy popular music, or keep up with the Kardashians by some other means.