Want to feel good about America? Take a look at the worldwide stock market

I’m sitting under a thatched roof at the Hula Hut restaurant in Austin. The day couldn’t be better. Hula Hut is located above the water, upstream from Lady Bird Lake. It’s far from the traffic noise of downtown Austin, bathed in what have been generations of casual light.

There’s old, funky, laid-back, laid-back Austin. And then there’s the new high-tech, geek/engineer Austin. Hula Hut definitely belongs to the pre-nerd era. It’s a place that makes you take a deep breath and say, “Life is good.”

But it’s not all fun and games today.

A friend of mine who is in town for the Dimensional Funds conference slides across the table with a ring bound book. It is Matrix book 2022, a fund company’s annual book of compound returns for different asset classes.

In other words, it’s a book full of numbers.

Select an asset class. Then select a start date and an end date. Slide your fingers down the page to the appropriate cell in the matrix. And… zap, there is an annual compounded return over the period.

Yeah, this isn’t that exciting for a lot of people. But I have always loved this book.

It works for me like I imagine the other book worked for my father. When he served in the escort of the destroyer USS Lloyd E. Acree at the end of World War II, he had a copy Smoley’s logarithmic trigonometric tables, better known as Smoley tables. I inherited the book in 1958, just days before I started school at the Massachusetts Institute of Technology.

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But today it is not the tables in the Matrix book that capture my attention. It’s a two-page painting with squares and rectangles of different sizes arranged in an unusual pattern, like something Piet Mondrian might have done, but with less color.

As far as pictures go, it’s definitely worth a thousand words. The illustration is called “World Stock Market Capitalization”— the total value, in dollars, of stocks in countries around the world. Each shape represents the country’s market capitalization. The total value of all these markets at the end of last year was an incredible 87 trillion dollars.

Dimensional Funds Matrix Book 2022 is an annual survey of investment performance.  This one...
Dimensional Funds Matrix Book 2022 is an annual survey of investment performance. This page shows the world market capitalization.(dimensional fund)

World markets

In a quick scan, you see what you expect to see: the US stock market is the Big Kahuna. Estimated at $52.7 trillion at the end of 2021, its gray blob dominates two pages. The spot is twice as big as all other developed markets. And that’s five times more than all the developing countries combined, including China.

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But there is something inside the big gray square of our US market cap. It is a square made with broken lines.

It says: “Apple, $2.913 billion.” That’s billions or, in short, $2.9 trillion. As for those squares and rectangles like Mondrian, it is very large.

In fact, if Apple stock were a country, it would be fifth, just $100 billion behind China. The market value of Apple alone is almost 10 times greater than the value of the entire Russian stock market.

The chart is from last December, so of course it’s ancient history. Now, according to the website Morningstar, Apple is down to about $2.2 trillion. And everything else fell, and some more. Russia, deservedly, fell 49%.

Apple, by the way, is not the only mega stock on the American market. It is followed by Microsoft (now $1.7 trillion), Alphabet (now $1.16 trillion), Amazon (now $930 billion), and Tesla (now $609 billion). Each of these companies has a market value that would rank very high – in the top 20 or better – compared to the stock markets of entire nations around the planet.

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What does all this mean?

It’s about much more than money.

It’s a message about America. About creation and opportunity.

America is already great

I’m tired of hearing “Make America Great Again.” America was great at conception. It was great for generations. America is great now. It still doesn’t live up to its ideals at the time of conception, but we keep trying.

In a world that is still trying to extinguish the divine right of kings after thousands of years, it is premature to consider our concept a failure after only 250 years.

America will be great in the future – even with the usual warts, bumps, inconveniences and big mistakes at every turn.

Say what you will about our flawed past, our troubled present, or our uncertain future, America is still the best place to be. And America, so far in history, is the best we flawed people have been able to do.

That’s the best he can do.

It’s a really great thing that so many of us still believe we can do better.

We can all be thankful for that.

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