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I’m all for a sound industrial policy, but comparing market cap to GDP isn’t helpful. Better to compare corporate revenue which is typically 5% or less of mark
by mattclarkdotnet 3y ago
I’m all for a sound industrial policy, but comparing market cap to GDP isn’t helpful. Better to compare corporate revenue which is typically 5% or less of market cap for FAANG.
- SllX 3y ago> Better to compare corporate revenue which is typically 5% or less of market cap for FAANG. I wouldn’t even bother with that much. You’re comparing international corporations’ reported revenue with one measure of one country’s general economy. I know a lot of us here are from countries that are either really really big or really really rich or both, but most countries are not really really big or really really rich. The only thing reported revenue, GDP, and market cap have in common is a unit you can denominate them in, but GDP as measured in dollars or euros or whatever still isn’t money in the bank (and neither is market cap).
- mattclarkdotnet 3y agoReported revenue is pretty reliable. Profits not so much. Revenue for a company and GDP for a country are at least broadly comparable.
- scott_w 3y agoI know it's harder to know for sure, but wouldn't a country's "revenues" (tax, other revenues) vs corporate revenues be better? A country doesn't have instant access to its GDP. Or possibly just expenditure for both? I know borrowing can fill the gap between income/expenditure but it gives and idea of the actual cash that either entity can access.
- SllX 3y ago> Revenue for a company and GDP for a country are at least broadly comparable. It’s really not. One is a figure that a CPA (or whatever your country’s equivalent is) signs off on, reports, and is stored in or flowed through the reporting organization’s cash accounts and the other is a statistic represented by a figure that belongs to no organized entity whatsoever.