Visualizing The World"s Most Valuable Companies Of All Time

MODERN JUGGERNAUTS LIKE APPLE DON’T EVEN COME CLOSE

The Chart of the Week is a weekly Visual Capitalist feature on Fridays.

Courtesy of: Visual Capitalist

Before speculative bubbles could form around Dotcom companies (late-1990s) or housing prices (mid-2000s), Visual Capitalist"s Jeff Desjardins notes that some of the first financial bubbles formed from the prospect of trading with faraway lands.

Looking back, it’s pretty easy to see why.

Companies like the Dutch East India Company (known in Dutch as the VOC, or Verenigde Oost-Indische Compagnie) were granted monopolies on trade, and they engaged in daring voyages to mysterious and foreign places. They could acquire exotic goods, establish colonies, create military forces, and even initiate wars or conflicts around the world.

Of course, the very nature of these risky ventures made getting any accurate indication of intrinsic value nearly impossible, which meant there were no real benchmarks for what companies like this should be worth.

SPECULATIVE PEAK

The Dutch East India Company was established as a charter company in 1602, when it was granted a 21-year monopoly by the Dutch government for the spice trade in Asia. The company would eventually send over one million voyagers to Asia, which is more than the rest of Europe combined.

However, despite its 200-year run as Europe’s foremost trading juggernaut – the speculative peak of the company’s prospects coincided with Tulip Mania in Holland in 1637.

Widely considered the world’s first financial bubble, the history of Tulip Mania is a fantastic story in itself. During this frothy time, the Dutch East India Company was worth 78 million Dutch guilders, which translates to a whopping $7.9 trillion in modern dollars.

MODERN COMPARISONS

The peak value of the Dutch East India Company was so high, that it puts modern economies to shame.

In fact, at its height, the Dutch East India Company was worth roughly the same amount as the GDPs of modern-day Japan ($4.8T) and Germany ($3.4T) added together.

Even further, in today’s chart, we added the market caps of 20 of the world’s largest companies, such as Apple, Microsoft, Amazon, ExxonMobil, Berkshire Hathaway, Tencent, and Wells Fargo. All of them combined gets us to $7.9 trillion.

At the same time, the world’s most valuable company (Apple) only makes it to 11% of the peak value of the Dutch East India Company by itself.

HISTORIC HEAVYWEIGHTS

Despite the speculation that fueled the run-up of Dutch East India Company shares, the company was still successful in real terms. At one point, it even had 70,000 employees – a massive accomplishment for a company born over 400 years ago.

The same thing can’t be said for the other two most valuable companies in history – both of which were the subject of simultaneous bubbles occurring in France and Britain that popped in 1720.

In France, the wealth of Louisiana was exaggerated in a marketing scheme for the newly formed Mississippi Company, and its value temporarily soared to the equivalent of $6.5 trillion today. Meanwhile, a joint-stock company in Britain, known as the South Sea Company, was granted a monopoly to trade with South America. It was eventually worth $4.3 trillion in modern currency.

Interestingly, both would barely engage in any actual trade with the Americas.

The other historic heavyweights included in our chart?

• Saudi Aramco, at $4.1 trillion, based on calculations by University of Texas finance professor Sheridan Titman in 2010, and adjusted for inflation.


• PetroChina surpassed $1 trillion in market cap in 2007. Adjusted for inflation that’s $1.4 trillion today.


• Standard Oil, before its famous breakup due to monopolistic reasons, was worth at least $1 trillion. Adjusted for inflation it would likely be more, but we kept this conservative.


• Microsoft reached its peak valuation in 1999, at the top of the Dotcom Bubble. Today, that would be equal to $912 billion.

With Bitcoin"s Adolescence Comes Real Competition

Authored by Tom Luongo,

With the calling off of the New York Agreement to force the implementation of Segwit2x Bitcoin is now at a fascinating fork in the road (all puns intended).  Bitcoin prices are falling as people leave the network and Bitcoin Cash prices are spiking.

I advised my subscribers to hedge 15-25% of their Bitcoin position with Bitcoin Cash at $400 on October 28th.  That trade has a current return of over 300% with Bitcoin Cash now trading solidly above $1200.

Even with what now looks like a blow-off, near-term top in Bitcoin prices, Bitcoin investors are still up around $600 per Bitcoin (around 12%) since that day.  So, no one should be crying in their beer just yet.

Where Winning Looks Like Losing

But, as Rhett Creighton points out in a very good article at Cointelegraph,com, Bitcoin’s newfound weakness may be structural for more than just a few days worth of healthy, technical correction.

In short, the Bitcoin Core Developer team which won the battle over Segwit2x may have lost the war.  Bitcoin needs a transaction-scaling solution.  And it needs one quick.

Bitcoin Cash is a real competitor to Bitcoin because it combines big 8MB block and quick settlement times without any of the off-chain or side-chain complications associated with segregated witness (Segwit).  

But it does have the drawback of a single core developer. But, I’m a hard-core free-market guy.  Competition is what keeps everyone honest.

This is not to say that I’m not a fan of Segwit.  I am.  But, am I a fan of Segwit on Bitcoin?  I don’t know. 

In the world of cryptocurrencies I want a reserve asset that sits at the bottom of Exter’s Monetary Pyramid that can be 1) incorruptible and 2) a standard against which all other monetary-like assets, including utility tokens like Ethereum, can be measured.

The Current Monetary System – Exter’s Pyramid with Gold as the Foundational Asset

It’s the function that gold still functions within the global monetary system, despite protestations to the contrary by everyone from central bankers like Ben Bernanke (“I don’t know?  Tradition?”) to students of history like Martin Armstrong (a hedge against government incompetence).

Bitcoin has to continue to be that asset for the cryptocurrency and crypto-token community or the community will go adrift, unmoored from the anchor of sequentially-verified transactions from previous blocks.

The Real Battle for Bitcoin

And that’s where I have a bone to pick with Rhett over the following:

I fully expect the market cap of all crypto tokens to increase exponentially over the next few years, but this is not a winner-take-all scenario. Today, mainstream media financial advisors are touting Bitcoin as “the new gold,” but it can’t ever be that. To get a sense of how it’s different, imagine a universe where anyone could create a new kind of metal with essentially the same properties of gold.

 

Expecting Bitcoin to have the majority market share of Blockchains in the future is about as ridiculous as expecting the East India Company to be more valuable than all other corporations combined today.

Nonsense. The cryptocurrency market languished for four years because there was no compelling reason to back any other coin than Bitcoin in any substantive way.  The past is littered with technologically superior coins to Bitcoin and yet Bitcoin is $6000+ and many of them are $0.001.

The market craves those unit of account and store of wealth attributes that real monies have.  Just because something has the potential to be that doesn’t mean the market has to pay it any attention.  Otherwise Feathercoin or Litecoin would have out-competed Bitcoin three years ago.

Litecoin would have never had to incorporate the Lightning Network to differentiate itself from Bitcoin.

Rhett’s own project, Zcash, wouldn’t have been looking for its niche in the privacy space.  But, the use of these coins doesn’t mean that Bitcoin can’t act like digital gold.  In fact, with the collapse of Segwit2x and maintaining its high fees and low transaction density Bitcoin has more in common with physical gold than it has ever had previously now that the cryptocurrency market is maturing into one that settles actual trade.

Crypto-Gold Mine

It’s become a bad medium of exchange, just like gold.

If you want to move money around the net Litecoin is far superior as are dozens of other coins.  But, if you want the security of the oldest blockchain with the most trust built up over time, then Bitcoin is absolutely where you store your wealth.

Just like Gold.

Bitcoin’s Flaws Become Strengths when viewed as a Foundational Monetary Asset

Do you see the similarities here?  Gold is hard to do real business in.  Who wants to weigh out 0.1 grams of gold to buy a hamburger (around $4.50)?  There’s a real cost to doing transactions using gold as a medium of exchange.  It’s a time cost.

Bitcoin now looks exactly like Gold.  It’s expensive to own and or move Gold when compared against the dollar just like it is expensive and slow to move Bitcoins when compared with Litecoin or something else.

That makes its flaws strengths as a means by which to interface the ‘real’ world with the ‘crypto’ world.  Bitcoin doesn’t need to maintain transaction market share to maintain its relevance.  In fact, it losing market share is an expression that it is becoming that foundational asset we need it to be.

What we need is the volatility of the cryptocurrency exchange rates to stabilize.  For Litecoin to trade consistently within a 10% band relative to Bitcoin.  If we begin to see that volatility of the LTC/BTC pair die down over the next 18 months or so, then remember then you’ll know what is happening.

It will prove the whole cryptocurrency thesis that lack of central control over the issuance of monetary assets will be driven by end-users not central planners.

The dollar price of these coins will continue to rise, but they will do so in concert, in relation to the foundational asset, most likely Bitcoin.  Over time, we should see one currency emerge as the standard by which all others are measured.

Bitcoin’s Competition

But, Rhett is right that Bitcoin Cash has the real potential to be the real winner here.  Why? Because it is a soft fork of that original Bitcoin blockchain with the added advantages of a it being, for now, an excellent medium of exchange — low fees, short settlement times, no side-chains.

What this means is that Bitcoin Cash can, if its backers and developers stay on mission and are honest, compete with Bitcoin for the role of foundational asset.  Litecoin can’t.  It made it’s choice by going with side-chain payment processing.

The dark horse in this race is Bitcoin Gold. But, it too has the potential to become the new crypto-gold.

What Does this Look Like?

What we don’t know at this point is what the market wants in terms of cost structure for its reserve asset.

Do we want a very liquid one or a relatively-speaking illiquid one like Gold?  It’s a good question that I don’t have an answer to today.  My guess is an illiquid one that can reflect the value of the crypto-markets versus the value of the fiat-markets better by resisting hot money flows because of the high barrier to exchange.

Either Bitcoin or Bitcoin Gold.

But what I do know is that the entire cryptocurrency market just grew up a little and real world growing pains are on the horizon.

I would be hedged accordingly amongst all of the top market-cap coins that the market is right now separating off as serving real market needs.  I believe in the division of labor.  Each will serve different niches and work to keep the foundational coin developers honest.

There is no one blockchain can rule them all.

We tried that in the ‘real world,’ it was called the petrodollar and it gave rise to a level of wealth inequality and systemic corruption orders of magnitude larger than the world has ever seen.

Why would we want to recreate that in the crypto-world?  That’s what, ideologically, the Bitcoin Core developers were fighting for against Segwit2x.

If we want to make the crypto-dollar then we’ve learned absolutely nothing.

And we’re the ones that need to grow up, not Bitcoin.

The Latest Attempt To Win The Afghan War: Replace The Soldiers With Mercenaries

Authored by Daniel Lang via SHTFplan.com,

One of the most controversial aspects of the Iraq war was the heavy use of defense contractors, who were in many cases paid vast sums of money to do jobs that you’d think an ordinary soldier could do. When it was all said and done, defense contractors had reaped $138 billion dollars by providing security, logistics, and construction services. Among the most notorious of these contractors was Blackwater, whose employees gained a reputation for reckless behavior that caused many unnecessary deaths.

Fast forward to today, and now Blackwater’s founder, former Navy Seal Erik Prince, is pushing for a plan to win the war in Afghanistan by replacing the soldiers with defense contractors. Prince first suggested the plan last May in an op-ed in the Wall Street Journal, where he described this idea in colonial terms. The private military units would be based on units that were deployed by the British East India Company, and would be lead by a single person who he referred to as an “American Viceroy,” that would report directly to the president.

As strange as it may sound, Trump appears to be taking the idea seriously. It’s hard to blame him. Afghanistan is now America’s longest running war, and no matter how many soldiers, generals, aid, or money we throw at the country, nothing seems to bring stability. 

Which is why this radical new plan probably looks very enticing to Trump right now.

Under his proposal, private advisers would work directly with Afghanistan combat battalions throughout the country, and the air force would be used for medical evacuation, fire support and ferrying troops.

 

Prince said the contractors would be “adjuncts” of the Afghan military and would wear that nation’s military uniforms. Pilots would only drop ordnance with Afghan government approval, he said.

 

Currently, troops from a U.S.-led coalition are stationed primarily at top level headquarters and are not embedded with conventional combat units in the field. Under the plan the contractors would be embedded with Afghanistan’s more than 90 combat battalions throughout the country.

In addition the plan will supposedly cost $10 billion per year, which is a far cry from the $40 billion that is currently being spent. It would involve replacing much of the 8,400 troops who are currently stationed in Afghanistan with 5,500 contractors, and provide a privately owned air force of 90 planes that wouldn’t give fire support without the permission of the Afghan government.

However, there is one problem with this plan. There’s probably a good reason why our soldiers aren’t embedded with the Afghan army in such a decentralized fashion. It probably has to do with the fact that our soldiers are routinely killed by Taliban sympathizers masquerading as Afghan soldiers (many of whom are severely demoralized, poorly paid and equipped, and lead by corrupt officers). Without separating the contractors into heavily fortified compounds (as our military does right now), and by spreading them thin across a vast and desolate country, these contractors would be extremely vulnerable.

It’s certainly a unique plan that is at least different from what our military has been doing in Afghanistan since 2001, which has been more of the same, year after year. But it’s also fraught with danger and the potential for disaster. This is Afghanistan we’re talking about. When it comes to military operations led by advanced nations, disaster is always the safest bet. After all, they don’t call Afghanistan the “graveyard of empires” for nothing.

Perhaps instead of asking how we could win the war in Afghanistan, we should be asking ourselves how we can get out as fast as possible and cut our losses.

It’s been 16 years, and there’s no sign that the people in that country have any interest in becoming the kind of liberal democracy that we want them to be. And without that support, there is no military plan in the world that will ever give us a satisfying victory in Afghanistan.

'Literal Colonialism': Blackwater Founder Calls For "American Viceroy" To Rule Afghanistan

Prince continued:

In Afghanistan, the viceroy approach would reduce rampant fraud by focusing spending on initiatives that further the central strategy, rather than handing cash to every outstretched hand from a U.S. system bereft of institutional memory.

Prince insists that these are “cheaper private solutions,” but such privatization would also be a boon for military contractors.

As one critic noted, it is hardly surprising that a “war profiteer sees profit opportunity in war.” Blackwater, the private military company Prince founded in 1997—which now operates under the name Academi—made a fortune off the invasion of Iraq. In 2007, a New York Times editorial noted that Blackwater had “received more than $1 billion” in no-bid contracts from the Bush administration; that same year, Blackwater contractors shot and killed more than a dozen civilians in what came to be known as the Nisour Square massacre.

But “war profiteering” doesn’t quite capture the scope of Prince’s vision for Afghanistan. Despite the fact that private contractors have a long record of abuse and deadly criminality, Prince believes that they should have a stronger presence in a war that has spanned nearly 16 years and cost trillions of dollars.

Such a recommendation, combined with Prince’s invocation of the East India Company - a vestige of the British empire that “conquered, subjugated, and plundered vast tracts of south Asia for a century,” in the words of historian William Dalrymple - amounts to a call for “literal colonialism,” says Anil Kalhan, chair of the New York City Bar Association’s International Human Rights Committee.

Prince’s past connections to President Donald Trump indicate that his advice could potentially have some measure of influence on the White House.

As The Intercept‘s Jeremy Scahill, the author of a bestselling book on Blackwater, reported in January, Prince spoke with the Trump “team on matters related to intelligence and defense” and offered suggestions “on candidates for the Defense and State departments.”

In April, The Washington Post reported that Prince, presenting himself as “an unofficial envoy for Trump,” met in January with “a Russian close to President Vladi­mir Putin as part of an apparent effort to establish a back-channel line of communication between Moscow” and then-President-elect Trump. Prince also donated $250,000 to the Trump campaign following the 2016 Republican National Convention, according to the Post.

Prince’s op-ed comes as the Trump administration is reportedly considering sending more troops to Afghanistan as civilian deaths from the war have “reached record levels.”