What goes up will come down…

‘Won’t get fooled again’ by The Who, one of the best political songs there’s been, played on the radio as the Badger cogitated in wonderment at Apple’s $US2 trillion market valuation at his laptop. How in the world is Apple worth that much? Well, a simple insight can be found here.  Of course, Microsoft, Amazon, Facebook, and Alphabet (Google) are not far behind with valuations of $US1 trillion or more.

The Badger’s been around long enough to know that markets are fickle, and that today’s mega corporations will normally disappoint at some stage in the future with the man in the street bearing the brunt when they do.  Yes, the big tech companies are at the heart of today’s world of instant digital mass communication and consumption, but have their valuations and the view of their future prospects become absurd? Hmm. Probably, at least that’s what the Badger – who’s no expert in these matters – senses.  

The valuation of Apple alone is greater than the UK FTSE 100 as a whole, greater than the GDP of countries like the Netherlands, Canada and Italy, and about two/thirds of the GDP of India!  Isn’t that just bizarre when the company hasn’t really come up with anything new recently? By the way, this isn’t an anti-Apple rant, just an articulation that the valuations of tech giants may have become too detached from the real global economy experienced by the average man on the street.  The Dot.com boom and bust of some 20 years ago comes to mind, although – to be fair – the situation today is somewhat different.  Nevertheless, the Badger senses there’s not only a bubble of some kind, but also a strengthening sentiment that the tech giants are way too greedy, powerful, and uncontrollable.  You may, of course, disagree.

As the Badger cogitated, his wife observed, playfully, that if Apple and the other tech giants got together they would rule the planet making governments irrelevant!  The point was tongue in cheek, but nevertheless well made in today’s strange world.  She also asked how it was possible – apart from in the world of spreadsheets and speculation – for Apple to be valued at $US1 trillion two years ago and to have doubled in value in just 24 months.  The Badger, trying to avoid  any explanation of corporations and markets, just smiled and said, ‘What goes up will come down’  pointing to the bit of  correction the tech giants experienced last week as illustration.  

And then Barry McGuire’s ‘Eve of Destruction’ came on the radio. Cogitation ended with just the easy conclusion that while we live in strange times, they are probably no stranger than 50 years ago when The Who and Barry McGuire wrote their songs. The Badger put the laptop away, turned up the volume on the radio, and sang along proving that you can still have lots of fun without being a captive of the big tech giants and their $US trillion valuations.

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