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.
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
#32Rockefeller's Standard Oil was possibly even more valuable - at the time of it's anti-trust mandated breakup it produced around 90% of USA's oil. The companies it split into became Exxon, Mobil, Chevron, Amoco, Conoco, Unilever (!) and a whole bunch of others.
Re: Apple Is Not The Most Valuable Company In The History Of The World — IBM Is
#33For anyone who wanrs the original story here's the link.
http://www.cjr.org/the_audit/misleading_and_incomplete_cove....
PS: TechCrunch is somewhat pushy on they iPad app. I wonder if it is because the UX on mobile Safari is not that great.
Re: Apple Is Not The Most Valuable Company In The History Of The World — IBM Is
#34Actually 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.
Re: Apple Is Not The Most Valuable Company In The History Of The World — IBM Is
#35Earlier quoted context omitted.
Well, funny enough, if you look at the hacker news thread about Avatar hitting 1B, it is in fact discussed (one of the people mentioning it is me). I stand by this, just as with movies: it matters. If not these numbers are completely arbitrary and meaningless. It is equivalent to comparing, numerically, the price of one company in Pesos vs the price of another in Dollars, it would make no sense unless they are both c…
Oh, I kind of agree, but this just seems like "neener, neener, not the biggest." To take a different angle, computers and electronics have only gotten cheaper since 1967. So maybe Apple should be compared to a deflation adjusted IBM market cap. How would those numbers stack up?
I think the main point is that any time value in a monetary unit is measured over time, it is naturally adjusted for inflation. This is done with basically everything. So it's not necessarily a "neener neener" situation, it's applying standard process.
I think the real question that is trying to be answered is which company is worth more, period. How do you measure worth? In dollars is one way, making use of the market cap. Which has/has made a larger (positive) impact in the world is another. Which metrics should you use to get to the answer is the question...
Adjusting for change of price in goods (your suggestion) is a little shaky of any idea in my mind, as 1. inflation affects all goods instead of a subset, which means there's more choice. 2. IBM must've had it harder since the cost was higher and they still managed such a large market cap, ie. took more value output to create the market cap.
Just some thoughts.
Re: Apple Is Not The Most Valuable Company In The History Of The World — IBM Is
#36Why do people even care? Has consumer culture so overtaken our minds that we identify personally with the things that we buy?
Yet another mandatory XKCD: http://xkcd.com/922/
Re: Apple Is Not The Most Valuable Company In The History Of The World — IBM Is
#37Most valuable publicly traded company perhaps, see Saudi Aramco: http://blogs.mccombs.utexas.edu/titman/2010/03/01/more-thoug...
I'm curious where Standard Oil would stand had it not been broken up.
PetroChina was actually worth more than one billion USD a few years ago when a-shares became available at the Shanghai Stock Exchange.
Re: Apple Is Not The Most Valuable Company In The History Of The World — IBM Is
#38Countries are corporations too you know.
The United States of America (formerly known as The Virginia Company) is probably bigger then Apple could ever hope to be.
Re: Apple Is Not The Most Valuable Company In The History Of The World — IBM Is
#39Why do people even care? Has consumer culture so overtaken our minds that we identify personally with the things that we buy?
When you see people BUYING t-shirts which are blatant advertising of popular brands, then you reach that point where people identify themselves to a brand before all. That has been the case for a LONG time already.
Some people buying branded t-shirts may simply prefer the fit and price of a shirt, and don't care what it says on it.
Re: Apple Is Not The Most Valuable Company In The History Of The World — IBM Is
#40Let me get this out right now: Valuations mean jack shit (companies/houses/startups/humans - whatever). Especially "market caps".
Understand this:
21.91 million shares of Apple were traded yesterday. That is $14,460,600,000 moving around. [1]
Now you must adjust down for HFT traders, market makers, option hedgers, futures guys and anyone else who trades massive amounts of stock each and every day. My rule of thumb is ~10% actually moves hands (rather than just being moved around).
So now we are at $1,460,600,000. Only $1.5 billion dollars actually moved around yesterday. If you had $1.5 billion dollars yesterday you could've controlled the "market cap/valuation" of 1 billion shares and half a trillion in value.
You can control the market cap of anything utilising the fact that valuation uses multiplicative leverage on stuff that doesn't exist yet. [2][3] Indeed - all those teengers you see in college at age 11? Way overvalued - come and check back in 10 years. Fallacy of exponential growth runs rampant through most of finance, and teenage "prodigies". [4]
Basically with only $1.5 billion you could control the value of $500 billion dollars worth of assets - on any one day - that's it. This is how you get bubbles. This is how you can have stock market booms and busts.
Valuation leverage allows you to bid up prices for any stock using less than 2% in actual value, selling to the next tulip buyer whenever they come in trading. [5] If you had to use 100% cash - well there just ain't enough to go around my friends!
Startups?
Invest $20K just like YC does, valuing a company at $1 million - pre-product and sometimes even pre-team! The million dollars just ain't there yet - but everybody - look yonder - valuation and investor interest over the horizon!
Venture Funds?
Instagram received a $50 million cash injection which valued it at a cool $500+ million - pre-revenue. $500 million in cash wasn't actually in the coffers (or on the horizon) but Facebook look - just look - at our valuation/predicted growth - you gotta buy us out (with cash of course). And double the price while you're at it.
~2% of the world's value actually exchanged hands yesterday on the world markets.
~0.5% of market participants actually moved the prices that the rest of the world was priced at.
Hold ~2% of the world - and control it all.
Valuation is bullshit - it's like leverage without the cost of capital.
Sources:
[1] - https://www.google.com/finance?client=ob&q=NASDAQ:AAPL
[2] - https://en.wikipedia.org/wiki/Valuation_(finance)
[3] - https://en.wikipedia.org/wiki/Leverage_(finance)
[4] - http://xkcd.com/605/