Want to feel good in America? Take a look at the global stock market

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

There’s an old, funky, laid-back, lazy Austin. And there’s a new high-tech nerd/engineer, Austin. The Hula Hut definitely falls into the pre-nerd era. It’s the kind of 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 a Dimensional Funds conference slides a ring book across the table. It’s the Matrix Book 2022, the fund company’s annual record of compound returns for different asset classes.

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

Choose an asset class. Then choose a start date and an end date. Slide your fingers down the page to the appropriate cell in the matrix. And… zap, there’s the annualized compound return over the period.

Yes, it’s less exciting for many people. But I always liked this book.

It works, for me, like 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 of Smoley’s logarithmic trigonometric tables, better known as Smoley Tables. I inherited the book in 1958, just days before starting school at the Massachusetts Institute of Technology.

But today, it’s not the Matrix Book paintings that hold my attention. It’s a two-page image with squares and rectangles of varying sizes arranged in an odd pattern, like something Piet Mondrian might have done but with fewer colors.

As pictures go, it is certainly worth more than a thousand words. The illustration is called “Global Market Capitalization” – the total value, in dollars, of stocks in countries around the world. Each shape represents the market capitalization of a country. The total value of all these markets was $87 trillion at the end of last year.

Global Markets

In a quick analysis, you see what you expect to see: The US stock market is the Big Kahuna. Valued at $52.7 trillion at the end of 2021, its gray spot dominates both pages. The spot is twice as large as all other developed markets. And that’s five times the size of all emerging countries combined, including China.

But there is something inside the big gray square of our US market capitalization. It is a square made of dotted lines.

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

In fact, if Apple 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 whole thing Russian scholarship.

The chart is from last December, so of course that’s ancient history. Now, according to the Morningstar website, Apple is down to around $2.2 trillion. Everything else is also down, and much more. Russia, understandably, is down 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 value that would rank very high – in the top 20 or better – against the stock markets of entire nations all over the planet.

What does all this mean?

It’s about more than money.

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

America is already great

I’m tired of hearing “Make America Great Again”. America was great at design. It’s been great for generations. America is great now. It still falls short of its design ideals, but we keep trying.

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

America will be great in the future – even with the usual warts, bumps, embarrassments and big mistakes every step of the way.

Say what you will about our flawed past, problematic present, or uncertain future, America is still the best place to be. And America, so far in history, is what we very imperfect humans have managed to do best.

It’s as good as it gets.

What’s really great is that many of us still believe we can do better.

We can all be grateful for that.