4 ms·

Or is it possible to reflect inflation and the devaluation of money?

adventured 8y ago
Inflation is always a factor, however Apple's performance is legitimately extraordinary in size for any age. In 1980 GM was considered a monster with $2.8 billion in profit, number two on the Fortune 500 list that year (behind Exxon Mobil). Apple's profit today rolled back to 1980 would be about $16.x billion. Roughly six times that of GM then, and roughly four times that of Exxon, the high mark. Using the BLS inflation adjustment calculator, GM's profit in 1980 is about $9 billion today. That'll get you ranked roughly #25-30 on the Fortune 500 today. #25 in 1980 was Union Carbide at about $550m in profit, or ~$1.75b in today's dollar. That's good for about #200 today. The corporate profit boom isn't primarily an inflation based phenomenon, it's the epic expansion of the global economy and the way the large S&P 500 type firms have benefited in an outsized manner.
- a008t 8y ago
  Worth noting that the large S&P 500 firms change over time. It has not really been "big corporations getting bigger / having a profit boom", I think.
- votepaunchy 8y ago
  Should this comparison also account for the growth of the US population and economy? Inflation-adjusted GDP has tripled since 1980 and one would need to adjust the size of the S&P accordingly to make a fair comparison.
fauigerzigerk 8y ago
You're right, the $1T valuation is neither surprising, considering inflation, nor record breaking as a share of the S&P 500: https://www.bloomberg.com/news/articles/2018-06-04/apple-s-1-trillion-chase-unprecedented-try-totally-logical https://www.bloomberg.com/news/articles/2018-06-04/apple-s-1... And I think that's why the NYT article quickly moves on from its clickbait headline (they had to put that number up there!) to far more interesting comparisons.
YokoZar 8y ago
Or any other reason why Apple might delay dividend payments. Other companies could have hit a trillion sooner if they hoarded cash like a dragon or only did buybacks.
- scarface74 8y ago
  Apple has been paying dividends since 2012. http://investor.apple.com/dividends.cfm http://investor.apple.com/dividends.cfm
mkirklions 8y ago
This is why I dont consider Bitcoin a risky investment anymore. I can see the inflation around me. Historically and currently countries have an economic crisis where the government has hyperinflation. Id rather have gold than government money.

Inflation is always a factor, however Apple's performance is legitimately extraordinary in size for any age. In 1980 GM was considered a monster with $2.8 billion in profit, number two on the Fortune 500 list that year (behind Exxon Mobil). Apple's profit today rolled back to 1980 would be about $16.x billion. Roughly six times that of GM then, and roughly four times that of Exxon, the high mark. Using the BLS inflation adjustment calculator, GM's profit in 1980 is about $9 billion today. That'll get you ranked roughly #25-30 on the Fortune 500 today. #25 in 1980 was Union Carbide at about $550m in profit, or ~$1.75b in today's dollar. That's good for about #200 today. The corporate profit boom isn't primarily an inflation based phenomenon, it's the epic expansion of the global economy and the way the large S&P 500 type firms have benefited in an outsized manner.

a008t 8y ago
Worth noting that the large S&P 500 firms change over time. It has not really been "big corporations getting bigger / having a profit boom", I think.
votepaunchy 8y ago
Should this comparison also account for the growth of the US population and economy? Inflation-adjusted GDP has tripled since 1980 and one would need to adjust the size of the S&P accordingly to make a fair comparison.

fauigerzigerk 8y ago

You're right, the $1T valuation is neither surprising, considering inflation, nor record breaking as a share of the S&P 500: https://www.bloomberg.com/news/articles/2018-06-04/apple-s-1-trillion-chase-unprecedented-try-totally-logical https://www.bloomberg.com/news/articles/2018-06-04/apple-s-1... And I think that's why the NYT article quickly moves on from its clickbait headline (they had to put that number up there!) to far more interesting comparisons.

YokoZar 8y ago

Or any other reason why Apple might delay dividend payments. Other companies could have hit a trillion sooner if they hoarded cash like a dragon or only did buybacks.

scarface74 8y ago
Apple has been paying dividends since 2012. http://investor.apple.com/dividends.cfm http://investor.apple.com/dividends.cfm

mkirklions 8y ago

This is why I dont consider Bitcoin a risky investment anymore. I can see the inflation around me. Historically and currently countries have an economic crisis where the government has hyperinflation. Id rather have gold than government money.