Apple's first physical retail store is located in the populous city of Mumbai.
Punit Paranjpe | Afp | Getty Images
Dimensional's Matrix Book is an annual review of global returns that highlight the power of compound investing.It's a fascinating document: you can look up the compounded growth rate of the S&P 500 for every year going back to 1926.
Buried on page 74 is a chapter on "World Equity Market Capitalization," listing the market capitalization of most of the world, country by country.No surprise, the U.S. is the global leader in stock market value.The $40 trillion in stock market wealth in the U.S. is almost 60% of the value of all the equities in the world.
Global market capitalization, by country
(in trillions, with % of global share)
- U.S. $40 trillion (59%)
- Japan $4.1t (6%)
- United Kingdom $2.6t (4%)
- China $2.5t (4%)
- Canada $2.1t (3%)
- France $1.8t (3%)
- Switzerland$1.6t (2%)
- India$1.4t (2%)
- Australia$1.4t (2%)
- Germany$1.3t (2%)
Source: Dimensional Funds, 2023 Matrix Book
Here's where it gets fun.My friend Ben Carlson pointed out that Apple's current market capitalization of about $2.7 trillion this week exceeds the entire market capitalization of the United Kingdom, the third biggest stock market in the world.
Apple vs. the world
(market capitalization)
- Apple: $2.7 trillion
- UK : $2.6t (595 companies)
- France:$1.8t (235 companies)
- India:$1.4t (1,242 companies)
- Germany: $1.3t(255 companies)
Source: Dimensional Funds, 2023 Matrix Book
Not only is Apple bigger than all 595 companies that list in the United Kingdom, it's bigger than all the companies in France (235 companies), and India (1,242 companies).
Apple is twice the size of Germany's entire stock market, with 255 companies.
In part, this reflects the extreme values that are being given to companies that are: 1) successful, and 2) growth-oriented.
That orientation toward tech and growth can influence the character of a country's market.
Germany, for example, is by far the largest country in Europe by GDP, yet its stock market is smaller than the U.K, France and Italy. In part this reflects the fact that there are fewer companies listed than the U.K., but also because Germany has more value-oriented companies. As a result, its market multiple — the price investors pay for a dollar or a euro's worth of profit — is considerably lower than that of the U.S.
Regardless:Apple is bigger than the entire U.K. stock market?Twice as big as all of Germany?That is amazing.
As an enthusiast deeply immersed in the world of finance and market dynamics, I find the intricate interplay of economic forces and the valuation of companies utterly fascinating. My expertise extends to dissecting annual reviews, like Dimensional's Matrix Book, which provides a comprehensive insight into global returns and the power of compound investing.
The evidence presented in this article, with its focus on Apple's market capitalization compared to entire countries, is a testament to the extraordinary scale and influence of certain tech giants. Now, let's delve into the key concepts and details mentioned in the article:
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Apple's Market Capitalization:
- The article highlights Apple's current market capitalization, a staggering $2.7 trillion. This figure alone is a testament to Apple's unparalleled success and its standing as one of the most valuable companies globally.
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Dimensional's Matrix Book:
- This annual review provides a deep dive into global returns, emphasizing the concept of compound investing. It allows investors and enthusiasts to explore the compounded growth rate of the S&P 500, offering historical perspectives dating back to 1926.
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World Equity Market Capitalization:
- The Matrix Book includes a chapter on "World Equity Market Capitalization," revealing the market capitalization of countries worldwide. The data showcases the dominance of the U.S., which holds $40 trillion in stock market wealth, comprising nearly 60% of the global share.
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Global Market Capitalization by Country:
- The article provides a breakdown of global market capitalization by country, including the U.S., Japan, the United Kingdom, China, Canada, France, Switzerland, India, Australia, and Germany. The percentages highlight each country's share of the global market.
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Apple vs. Global Markets:
- The article compares Apple's market capitalization with that of entire countries, showcasing the astonishing fact that Apple's $2.7 trillion valuation exceeds that of the United Kingdom, the third-largest stock market in the world. The comparison extends to France, India, and Germany, emphasizing Apple's colossal size.
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Factors Influencing Market Dynamics:
- The article touches on the influence of extreme valuations given to successful and growth-oriented companies. This is a key factor shaping the character of a country's market. For instance, Germany's stock market, despite being the largest country in Europe by GDP, is smaller than the U.K., France, and Italy, partly due to the prevalence of value-oriented companies.
In conclusion, the financial landscape, as depicted in this article, showcases the remarkable scale of Apple's market capitalization and its dominance compared to entire countries. The influence of tech-oriented and growth-focused companies on market dynamics is evident, emphasizing the evolving nature of global financial markets.
