The MASSIVE Incoming Problem for the World…

Опубликовано: 08 Ноябрь 2024
на канале: Jack Chapple

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On may 25th of 2023, the tech company Nvidia, had the 3rd largest one day valuation gain in the history of the stock market. Its valuation increased by $184 billion in a single day.
Just to put that into context for the average person. That increase in valuation is the equivalent of adding four hundred and forty two thousand average american homes, to the companies portfolio.
Its also the equivalent of the average annual salary of 3.1 million american workers.
Regardless, this increase in valuation was insane and historic…something that the company… and the world may never see again…Until…9 months later when nvidia had an even bigger single day gain, by gaining $247 billion dollars in valuation in one single day…
To put that into perspective as well, the most valuable company in the world in 2010 was Exxon Mobil, who had a total valuation of just over 300 billion dollars.
Meaning that nvidia gained almost as much value in a single day recently, than the total value of the most valuable company in the world 14 years ago.
And by the way, this isn't happening with just nvidia, its happening to every large company. Meta, apple, amazon, and many others are gaining tens of billions to hundreds of billions of dollars in value in essentially 8 hour periods, and investors are cheering this on. And for good reason. if you invest in the stock market, you want to get a good return.
But now we have companies like microsoft that are worth 3 trillion dollars, yet 6 years ago, the most valuable company in the world was worth only 1 trillion dollars.
But don’t worry…This is the sign of a booming economy right? And definitely not the sign of a dying empire…
Anyways, the stock market boom is actually not necessarily a cause, but a symptom of a much larger problem in the entire investment economy.
You see, there’s been a problem that has been growing since the 1990s, and its the there are less and less companies going public every single year.
Infact, in 1996 there were 8000 american public companies, yet today that number sits at around 3700. And the reason why is two fold. One is that a lot of large companies worth hundreds of millions or billions of dollars, do not wish to face any sort of public scrutiny and more regulation than private companies. In fact there’s a long list of ceo’s like elon musk that very much regret taking their companies public.
But another reason why there are less public companies today is that a lot of the ‘smaller’ billion dollar companies get bought up by the litany of trillion dollar corporations. It seems that almost everyday there is some sort of billion dollar acquisition by a private equity firm that no one has heard of, yet owns hundreds of billions of dollars in assets, or a giant tech company buys out a tiny 1 billion dollar smaller tech company, to gain control of their IP and assets.
All i'm trying to say is that Initial public offerings on the stock market are falling off a cliff to all time lows year after year. And so, there are less companies to invest in, yet there’s more money in the stock market. Meaning that companies' market caps and valuations should theoretically keep soaring, the longer this trend goes on.
There are also a few other things going on with the investing economy that are a bit worrisome to the larger economy as a whole. You see, when the world stops innovating, or an investment environment becomes very risky, two things happen. One, investors put more of their money into the largest companies in the world, because they are too big to fail, and sometimes even pay a safe dividend back to the investor. Two, investors put their money into an investment sector that is arguably the oldest investment vehicle in the world, and that is real estate.
Lets say you are a large corporation, and you have so much money in the bank, that you don't know what to do with it. Do you buy up smaller companies to try to make yourself a monopoly? Well yes, but you still have money leftover. Do you put that money into research and development which would hire thousands of new people and be better for the middle class? Pfft no. Thats way to risky. You cant spend a billion dollars to do that even if you have hundreds of billions in an assortment of banks all over the world. And who cares about the middle class, right?

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