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Weak argument as this is America's Saudi Aramco. Wait Saudi Aramco is America's Saudi Aramco, this analogy has limits. My point is that digital data is a commo

Weak argument as this is America's Saudi Aramco. Wait Saudi Aramco is America's Saudi Aramco, this analogy has limits. My point is that digital data is a commodity that has been found and being excavated at high margins and will be protected by their countries, just because some other countries are trying to do the same thing. So while California and the European Union are making it more expensive to do this, DC and Beijing are only protecting the golden goose. Legislative changes and protections that raise the cost around monetizing user data can debilitate them heavily. Just watch for those. But on autopilot these companies will be fine as they convert quarterly revenue into a big cash warchest instead of reinvestment fuel.

adventured 6y ago
> Weak argument as this is America's Saudi Aramco. Microsoft (or Apple) is America's Saudi Aramco, if we're speaking of important & highly profitable corporations. They're vastly more profitable than Google or Facebook, and far more sustainable (in terms of market position, regulation, anti-trust, etc). In fact, Microsoft ($52b) will soon have as much operating income as Google ($35b) and Facebook ($26b) combined, and will soon surpass Apple ($65b; which has barely grown its operating income in four years and has weak prospects for income growth). To make matters worse, Google is stagnating and losing their hold on the ad market (while being pursued for anti-trust). Google also suddenly lost their leadership, Larry & Sergey cast Alphabet adrift after creating that mess, said good luck and adieu (to run & hide from the legal tsunami). Microsoft by contrast is booming, has a solid regulatory context, and has one of the world's best CEOs at the helm. Here is Microsoft's income growth: $22b -> $35b -> $43b -> $52b If I were a nation, I'd rather own Microsoft than Aramco, much less Google & Facebook. Easy choice. Aramco has a collapsed future and they're trapped in low oil price hell indefinitely. Microsoft is probably going to $75-$80 billion per year in operating income in five years, on their way to $100 billion this decade. As far as individual corporate entities goes, nothing like the Microsoft profit machine has ever existed before (Apple comes the closest, and they're stuck in a zero growth smartphone market). Apple's cost of revenue is 61.8% of sales; Microsoft's cost of revenue is 31.7% of sales, their operating income margin is a wild 37.4% (given their scale it's something beyond extraordinary).
- oblio 6y ago
  Microsoft's IPO created tens of thousands of millionaires, and that was in the 80's. Microsoft is many things, a lot of them very ugly, but it for sure is impressive, too.
- lioeters 6y ago
  Perhaps the analogy can be drawn that FAA(M)NG are America's new oil industry, as essential to the national economy and security? From a quick search, I found the "Forbes Global 2000" list of the most profitable business sectors (in 2019). From the top, in trillions: - Oil and gas - 4.797 - Technology and communication - 4.726 - Banking - 4.424 - Retailing - 3.814 - Automotive - 2.847 Source: https://www.nsenergybusiness.com/news/oil-gas-revenue-forbes-2019/ https://www.nsenergybusiness.com/news/oil-gas-revenue-forbes... Seeing how Microsoft accounts for only a portion of the second most profitable sector, I'd imagine the whole lot of top tech companies in the U.S. would be considered essential for national interest. --- Then I found "The World's 10 Most Profitable Companies" (2019). - Saudi Aramco - $110.9 billion - Apple - $59.5 billion - Industrial & Commercial Bank of China - $45 billion - Samsung Electronics - $39.8 billion - China Construction Bank - $38.4 billion - JPMorgan Chase & Co. - $32.4 billion - Alphabet - $30.7 billion - Agricultural Bank of China - $30.6 billion - Bank of America Corp. - $28.1 billion - Bank of China - $27.2 billion From their summary: > Saudi Aramco is by far the world's most profitable company. > Most of the global leaders in profits are based outside the U.S. > State-owned Chinese banks are among the profit leaders ..So I guess Saudi Aramco is still America's Saudi Aramco.
  - vmception 6y ago
    Check out Saudi Aramco’s gross income, and look at the price they actually sell oil at. Its insane what is possible in the commodities market. And to think there are so many players that aren't publicly traded, and it has been this way for a century? There are some extremely wealthy people out there we have no clue about.
- jon-wood 6y ago
  > will soon surpass Apple ($65b; which has barely grown its operating income in four years and has weak prospects for income growth) At what point does a company get to say "hey, we probably don't need to grow income much more"? At $65b Apple would qualify as the 72nd highest GDP in the world if it were a country[1], my understanding is even now they have more income than they can feasibly spend. It just doesn't make sense to me that they're getting penalised for not growing their income at this point. [1] https://www.worldometers.info/gdp/gdp-by-country/ https://www.worldometers.info/gdp/gdp-by-country/

adventured 6y ago

> Weak argument as this is America's Saudi Aramco. Microsoft (or Apple) is America's Saudi Aramco, if we're speaking of important & highly profitable corporations. They're vastly more profitable than Google or Facebook, and far more sustainable (in terms of market position, regulation, anti-trust, etc). In fact, Microsoft ($52b) will soon have as much operating income as Google ($35b) and Facebook ($26b) combined, and will soon surpass Apple ($65b; which has barely grown its operating income in four years and has weak prospects for income growth). To make matters worse, Google is stagnating and losing their hold on the ad market (while being pursued for anti-trust). Google also suddenly lost their leadership, Larry & Sergey cast Alphabet adrift after creating that mess, said good luck and adieu (to run & hide from the legal tsunami). Microsoft by contrast is booming, has a solid regulatory context, and has one of the world's best CEOs at the helm. Here is Microsoft's income growth: $22b -> $35b -> $43b -> $52b If I were a nation, I'd rather own Microsoft than Aramco, much less Google & Facebook. Easy choice. Aramco has a collapsed future and they're trapped in low oil price hell indefinitely. Microsoft is probably going to $75-$80 billion per year in operating income in five years, on their way to $100 billion this decade. As far as individual corporate entities goes, nothing like the Microsoft profit machine has ever existed before (Apple comes the closest, and they're stuck in a zero growth smartphone market). Apple's cost of revenue is 61.8% of sales; Microsoft's cost of revenue is 31.7% of sales, their operating income margin is a wild 37.4% (given their scale it's something beyond extraordinary).

oblio 6y ago
Microsoft's IPO created tens of thousands of millionaires, and that was in the 80's. Microsoft is many things, a lot of them very ugly, but it for sure is impressive, too.
lioeters 6y ago
Perhaps the analogy can be drawn that FAA(M)NG are America's new oil industry, as essential to the national economy and security? From a quick search, I found the "Forbes Global 2000" list of the most profitable business sectors (in 2019). From the top, in trillions: - Oil and gas - 4.797 - Technology and communication - 4.726 - Banking - 4.424 - Retailing - 3.814 - Automotive - 2.847 Source: https://www.nsenergybusiness.com/news/oil-gas-revenue-forbes-2019/ https://www.nsenergybusiness.com/news/oil-gas-revenue-forbes... Seeing how Microsoft accounts for only a portion of the second most profitable sector, I'd imagine the whole lot of top tech companies in the U.S. would be considered essential for national interest. --- Then I found "The World's 10 Most Profitable Companies" (2019). - Saudi Aramco - $110.9 billion - Apple - $59.5 billion - Industrial & Commercial Bank of China - $45 billion - Samsung Electronics - $39.8 billion - China Construction Bank - $38.4 billion - JPMorgan Chase & Co. - $32.4 billion - Alphabet - $30.7 billion - Agricultural Bank of China - $30.6 billion - Bank of America Corp. - $28.1 billion - Bank of China - $27.2 billion From their summary: > Saudi Aramco is by far the world's most profitable company. > Most of the global leaders in profits are based outside the U.S. > State-owned Chinese banks are among the profit leaders ..So I guess Saudi Aramco is still America's Saudi Aramco.
- vmception 6y ago
  Check out Saudi Aramco’s gross income, and look at the price they actually sell oil at. Its insane what is possible in the commodities market. And to think there are so many players that aren't publicly traded, and it has been this way for a century? There are some extremely wealthy people out there we have no clue about.
jon-wood 6y ago
> will soon surpass Apple ($65b; which has barely grown its operating income in four years and has weak prospects for income growth) At what point does a company get to say "hey, we probably don't need to grow income much more"? At $65b Apple would qualify as the 72nd highest GDP in the world if it were a country[1], my understanding is even now they have more income than they can feasibly spend. It just doesn't make sense to me that they're getting penalised for not growing their income at this point. [1] https://www.worldometers.info/gdp/gdp-by-country/ https://www.worldometers.info/gdp/gdp-by-country/