hello and welcome back to float it's
been a quiet day for markets across the
world reflecting a general lack of
conviction either positive or negative
that's been around for some weeks but
you did have one rather intriguing
development here in the state switches
that was further pressure on Apple which
means as you can see from this chart
that Apple's title s the world's largest
company is once again under threat this
time from google you can see that Google
briefly overtook it earlier this year it
appears likely to do so again now this
is part of a longer-term pattern Apple
is under pressure it is now as low as it
has been in two years if we now take a
look at this next chart you can see that
in the time since it was last at this
level google has managed to continue to
log steady regular progress you haven't
seen that from Apple obviously there is
a great concern about revenues from the
iphone they appear to be set to decline
it should of course always have been in
the price that at some point iPhone
revenues will inevitably peak and start
to slow down but it still seems somehow
to have taken people by surprise now I'm
not going to make any predictions about
the short term it's quite possible that
Google which is obviously a very great
company will be a great investment for a
while but for the longer term i am
prepared to suggest that it would not be
a good idea to invest in google now we
can illustrate that for you if we take a
look now it's the the performance this
is the market cap of the six companies
to have been the largest in the SP since
1990 in the last quarter of a century
we're excluding cisco systems which was
the number one for a few days back in
the madness of the tech bubble in two
thousand and you can see that there is
one very clear pattern that emerges from
all of those is that companies don't get
superseded as the largest by seeing
somebody overtake them they tend to get
superseded as the largest by falling
themselves you can see that before liang
GE
Microsoft and now it happens to now it's
happened to Apple now in many ways that
would make sense if you get to be the
largest company it implies that you are
very fully valued or that you have a
business model that is working about as
well as it possibly could and that will
naturally tend to attract more
competition or more attention from the
antitrust authorities if we take a look
at this final chart what you can see
here is however for companies that were
the largest or some point during the
1990s have fared during this century
since the beginning of 2000 this is all
relative to the SP and you can see that
only Exxon among these has even managed
to be ahead of the market and in exons
case that's very much driven by air the
oil price and it's underperformed very
drastically since the top of the oil
market in 2008 in general and if we'd
gone back to some of the previous
largest companies like DuPont General
Motors or walmart or AT&T all great
companies at one point all pegged back
for good reason the point would perhaps
become even clearer it's just not a
great idea once a company is already the
biggest to invest in it congratulations
google for the longer term it's probably
not a great investment