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

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

There is old, funny, calm, lazy Austin. And there’s new high-tech nerd/engineer Austin. Hula Hut definitely falls into 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 a ring binder across the table. It is Matric Book 2022, a fund firm’s annual composite book of returns for various asset classes.

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

Select an asset class. Then choose a start date and an end date. Drag your fingers down the page to the appropriate matrix cell. And… ap, there’s the annual compounded return over the entire period.

Yeah, it’s not that exciting for a lot of people. But I have always loved this book.

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

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But today, it’s not the tables in the Matrix Book that grab my attention. It’s a two-page image spread out with squares and rectangles of various sizes arranged in an odd pattern, like something Piet Mondrian might have done, but with less color.

As pictures go, it’s definitely worth a thousand words. The title of the illustration is “World Stock Market Capitalization,” the total dollar value of stocks in all countries of the world. Each shape represents the country’s market capitalization. The combined value of all these markets reached a staggering $87 trillion at the end of last year.

Dimensional Funds 2022 Matrix Book is an annual review of investment performance.  This...
Dimensional Funds 2022 Matrix Book is an annual review of investment performance. This page shows the world market capitalization.(Dimensional Fund)

World markets

In a quick scan, you see what you expect: the US stock market is the Big Kahuna. It was worth $52.7 trillion at the end of 2021, and both pages are dominated by a gray spot. Blot is twice the size of all other developed markets. And that’s five times more than all emerging market countries combined, including China.

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But there’s something inside the big gray area of ​​our US market cap. It is a square formed by dotted lines.

It says, “Apple, $2,913 billion.” That’s billions, or $2.9 trillion for short. As those Mondrian-esque squares and rectangles go, it’s very large.

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

The chart is from December of last year, so of course it’s ancient history. Apple is now down to about $2.2 trillion, according to Morningstar. Everything else has gone down too, and some a lot more. Russia deservedly decreased by 49%.

Apple, by the way, is not the only mega-stock in the US 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 capitalization that would be very high—20 or better—compared to the stock markets of entire countries around the planet.

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What does it all mean?

It is about much more than money.

It’s news about America. About creation and possibilities.

America is already great

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

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

America will be great in the future—even with the usual warts, bumps, embarrassments, 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 that we very imperfect humans have been able to accomplish.

It’s as good as it gets.

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

We can all be thankful for that.

New homeowners are in for a rude awakening


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