| ▲ | fooker 2 hours ago | |
> The super funds are bigger than the GDP of the economy they reside in! You are comparing the absolute value of something versus yearly performance. Market cap vs revenue. | ||
| ▲ | shoo 2 hours ago | parent | next [-] | |
I agree - they're measuring completely different properties of different populations of things, over completely different time horizons. Comparing them doesn't seem very useful. Market caps are roughly expected future earnings, discounted back to give some net present value. They're expectations about the profitability of businesses, with expected profits accumulated over forecasts decades into the future. Market caps ignore privately held businesses, small businesses, state owned businesses & economic activity, economic output that might be happening at a household level, etc. GDP is some peculiar measure of a country's economic output, over one year. It doesn't care if the economic activity is profitable or not & it doesn't care if the surplus of the economic activity is extracted by public companies or not. It's not forward-looking & based on expectations. all that said, ggm has a fair point that individual investors & retirees with share portfolios directly benefit from the profits of companies whose economic activities may not be particularly pro-social & beneficial to the world. it's similar for climate change -- easy to point the finger at the energy producer, the big dirty brown coal plant. harder to point the finger at the demand side of the same equation - much of which is household demand. but both the individual end consumer households and the energy producer & everyone else involved in the value chain benefit out of the trade, even if the trade is net-negative for the world if we were to properly account for the externalities (e.g. polluting the atmosphere with CO_2 pushes the costs to everyone on the planet, current & future generations, not just the folks benefiting from the trade). | ||
| ▲ | ggm an hour ago | parent | prev | next [-] | |
True and fair. I committed a dimension sin. | ||
| ▲ | ericd 34 minutes ago | parent | prev [-] | |
Yes, but I think with bafflingly huge numbers, it's a useful reference point. ~the value of all the stuff and services made in Australia for the year! | ||