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Apple Is Not The Most Valuable Company In The History Of The World — IBM Is

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Re: Apple Is Not The Most Valuable Company In The History Of The World — IBM Is

#61

Earlier quoted context omitted.

I'm not so sure that temporarily changing the market cap of apple really would count as controlling it. It's like saying: I can jump on the field at a Yankee game and "control" 50k spectators and 50m viewers. You may influence them for about a second, but the farther you try to bring the situation from the market's desire, the quicker you'll be corrected. Sinking 1b into selling apple short would make a small, tempor…

You ignore the effect of feedback loops. You are also making the fallacy of reification (market doesn't want anything). They key part to this lesson is that valuations are essentially arbitrary (not about market manipulation - although market dynamics are an interesting subject). Take no stock in them (pun intended) - just like you should ignore the predictions of pundits. The following examples exemplify the meaning…

If I'm dying of dehydration - the next cup of water is worth most of my future earnings. If I just had a glass - it's worth next to nothing. Dying because a fire is burning and you're running out of air? Oxygen tank would be pretty handy right about now. Got enough oxygen? Pfft don't need your tank.

These are examples of arbitrageable opportunities. The wealth you can create by moving a glass of water from a lake to a desert is a real thing. Valuations aren't "meaningless" in that way unless you take the extreme nihilist position of everything being meaningless because it would change in a different situation. That's not meaninglessness, it's just context-sensitivity.

The fallacy of reification only occurs if you assign value to the existence of things (like "we should reduce regulation because the market wants it"). It's perfectly useful and common to say things like "the market wants" to mean "the market acts in a way such that were it a sentient being it would act this way because of a conscious desire" without actually holding the view that the market is a sentient being. That's just how English works (see, I did it right there).

Re: Apple Is Not The Most Valuable Company In The History Of The World — IBM Is

#62

Earlier quoted context omitted.

You ignore the effect of feedback loops. You are also making the fallacy of reification (market doesn't want anything). They key part to this lesson is that valuations are essentially arbitrary (not about market manipulation - although market dynamics are an interesting subject). Take no stock in them (pun intended) - just like you should ignore the predictions of pundits. The following examples exemplify the meaning…

If I'm dying of dehydration - the next cup of water is worth most of my future earnings. If I just had a glass - it's worth next to nothing. Dying because a fire is burning and you're running out of air? Oxygen tank would be pretty handy right about now. Got enough oxygen? Pfft don't need your tank. These are examples of arbitrageable opportunities. The wealth you can create by moving a glass of water from a lake to…

People conflict agency with representation all the time.

This is not a good thing for every situation - especially abstract concepts such markets and governments.

I never said statistical arbitrage was not possible. I merely indicated that another's valuation is meaningless to your decision about future profits generated by an entity.

I'm probably a nihilist then aren't I. Why bother arguing with me at all then? :-)

Re: Apple Is Not The Most Valuable Company In The History Of The World — IBM Is

#63

The article has wrong facts. The columbia journalism review author double counted inflation. The NYTimes piece he cites has already adjusted for inflation in the 1967 IBM Market cap.

This is by far the most important comment on the page. Very frustrating that, when I read it, it was nowhere near the top.

[deleted]

Re: Apple Is Not The Most Valuable Company In The History Of The World — IBM Is

#64
post #47
post #37

Earlier quoted context omitted.

PetroChina was actually worth more than one billion USD a few years ago when a-shares became available at the Shanghai Stock Exchange.

You mean trillion I think.

In numbers, I mean 10^12. As a written word, you are right that for most HN readers, trillion is the probably the correct term.

Re: Apple Is Not The Most Valuable Company In The History Of The World — IBM Is

#65

When are these numbers ever inflation adjusted? Biggest grossing movie of all time inflation adjusted is still Gone With the Wind, but that didn't really stop people from talking about Titanic or Avatar.

I think the East India Tea Company should factor into this discussion.

Re: Apple Is Not The Most Valuable Company In The History Of The World — IBM Is

#66
post #47
post #37

Earlier quoted context omitted.

PetroChina was actually worth more than one billion USD a few years ago when a-shares became available at the Shanghai Stock Exchange.

You mean trillion I think.

A long-scale billion is a short-scale trillion. How I hate this confusion! http://en.wikipedia.org/wiki/Long_and_short_scales

Re: Apple Is Not The Most Valuable Company In The History Of The World — IBM Is

#67

The article has wrong facts. The columbia journalism review author double counted inflation. The NYTimes piece he cites has already adjusted for inflation in the 1967 IBM Market cap.

This is by far the most important comment on the page. Very frustrating that, when I read it, it was nowhere near the top.

Agreed

Re: Apple Is Not The Most Valuable Company In The History Of The World — IBM Is

#69
post #23

Actually to really compare the weight the company had in its days it is more meaningful to compare its market cap to GDP. Wolfram Alpha gives me 852 billion for 1967 so IBMs market cap was approx. 22.5% of that. 2012's estimated GPD is 15.6 trillion thus Apple has a mere 4.2% of that. That was how big IBM really felt back then.

There was a huge error in the OP as explained in http://news.ycombinator.com/item?id=4411478.

If we correct the error, we conclude that in 1967, IBM's market cap was approximately 3.3% of US GDP.

That seems much more reasonable to me. Although IBM owned much more of the market for computers than Apple does, the role of computers in society has expanded drastically. E.g., there was no consumer computer market at all in 1967.

P.S. MSFT’s 1999 high of $620.6 billion represented 6.5% of 1999's US GDP.

Re: Apple Is Not The Most Valuable Company In The History Of The World — IBM Is

#70
post #23

Actually to really compare the weight the company had in its days it is more meaningful to compare its market cap to GDP. Wolfram Alpha gives me 852 billion for 1967 so IBMs market cap was approx. 22.5% of that. 2012's estimated GPD is 15.6 trillion thus Apple has a mere 4.2% of that. That was how big IBM really felt back then.

Am curious why someone downvoted this.

It's because the linked article double counted inflation: "IBM’s 1967 market cap was not $1.3 trillion in real dollars, it was $192.3 billion"
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