
Alphabet Becomes the Most Valuable Public Company in the World - pearlsteinj
http://techcrunch.com/2016/02/01/alphabet-becomes-the-most-valuable-company-in-the-world
======
cryptoz
The comparisons between Google and Apple aren't as apples-to-apples as
everyone in the media seems to think. If we're talking about the future of
these companies, and their earning power, they are situating themselves very
differently. Apple is really a consumer electronics company, Google is an
artificial intelligence company. And investors think more money will be in the
future of AI instead of consumer hardware and software, so even though
Google's earnings are smaller than Apple's, the future earning power is so
much more.

If Apple starts going faster on AI then I think it will be very interesting
between these two companies.

~~~
jonesb6
I absolutely agree that comparing Google and apple is silly. But calling
Google an "artificial intelligence" company is just feeding another buzzword
into the fire.

~~~
shimon
Google's flagship product is a box that you can type words into, and get
relevant texts/references/facts in response. It seems like a textbook example
of AI.

~~~
toomanybeersies
Google's flagship product is an advertising platform, not a search box.

~~~
Reedx
This is an annoying meme. Are concession stands the flagship product of movie
theaters?

People use Google for search, email, maps, etc. And that's what the company
was built for. If they had a better way to monetize than ads, they would
certainly drop ads.

~~~
msh
If that was how they made most of their money, yes.

~~~
rtpg
So is McDonalds a drink company? It makes most of its money from drinks...

The way a company makes its money is only weakly correlated to the service it
offers to users. Think about it: if McDonalds stopped selling food, it would
not have any customers. If Google stopped offering search, it would not have
any users.

~~~
msh
Google is a ad company who uses search to attract customers.

I don't see the McDonald's reference as the same, drinks are part of their
food product. Ads are not a integrated part of search (google did not start
out having ads).

~~~
ivanca
So, if set up a fashion magazine and then I fill it with ads, I'm in the
fashion magazines business, or in the ads business?

If someone asks, which of the 2 answers would be more helpful to them?

~~~
hanspeter
If your magazine starts handling ads in every other publisher's magazines too
and then starts handling ads in TV and then starts putting up billboards by
the highways, I'd say the answer isn't so obvious.

------
percentcer
It's interesting to that it took this long, just considering the utility of
each company. If Apple disappeared tomorrow I'd be moderately inconvenienced,
I'd have to pick up an Android handset instead of my iPhone and maybe set up
some new podcast feeds. If Google disappeared the world would screech to a
halt.

~~~
jad
How's that? To search the web, I'd go to DuckDuckGo or Bing or whatever. Other
companies also provide web mail, maps, office document solutions, etc.
Google's definitely better at those things, but using a worse version of those
products would not cause the world to "screech to a halt."

Probably the most disruptive thing if Apple vanished would actually be every
tech company suddenly needing to figure out how to use Windows or desktop
Linux.

~~~
sdrothrock
We could probably think of alternatives for most of these things, but there
are a lot of people who just use what came with their phone/browser.

Additionally, think of all of the Google-backed services out there provided by
other companies. How many companies use gmail heavily that would lose all
kinds of records?

Normal people would lose their e-mail too, and businessmen would lose a lot of
their calendars. The actual solution doesn't matter as much as the data
already invested in Google's solutions that would be lost if Google just
vanished.

~~~
latj
The world wouldnt screech to a halt though. We're talking about what would
happen if Google disappeared and its not a hypothetical situation. It happened
in China for a five year period starting in 2010. People who used Google
services were very upset. Replacements sprung up and quickly improved. They
never caught up to Google but they were good enough, along with propaganda and
the threat of prison, to keep people from making more of a commotion.

The biggest loss to humanity (in my opinion) would be all the translation data
they hold privately. But Google really just people and money. If Google the
entity disappeared tomorrow all those people who still know how to do the work
will just start working on it elsewhere and catch up quickly.

~~~
sdrothrock
> We're talking about what would happen if Google disappeared and its not a
> hypothetical situation. It happened in China for a five year period starting
> in 2010.

My bad. I was thinking about what would happen if Google disappeared as in,
one day their servers and services just aren't available for whatever reason,
rather than a staged transition/fade out.

------
tyingq
Paid clicks up 31% overall, on Google’s own sites, up 40%. That's a bit
concerning to me, especially when you consider:

a) That growth is outpacing internet traffic growth, and has for many years
now. Internet traffic CAGR is 23%[1]

b) The shift from desktop to mobile _should_ have the effect of reducing
clicks.

c) Since some of the growth is video, I would expect a decrease in click
growth related to this as well. Video adds to bandwidth growth pretty
directly. Click growth would be less direct.

Sergey and Larry, at least at one time, might have expressed concern:

"The goals of the advertising business model do not always correspond to
providing quality search to users"[2]

[1] [http://www.cisco.com/c/en/us/solutions/collateral/service-
pr...](http://www.cisco.com/c/en/us/solutions/collateral/service-
provider/visual-networking-index-vni/VNI_Hyperconnectivity_WP.html)

[2]
[http://infolab.stanford.edu/~backrub/google.html](http://infolab.stanford.edu/~backrub/google.html)

~~~
yulaow
for b) I would say the contrary. Have you tried entering in a common website
from a mobile browser without an adblocker? You get like so many ads, SO MANY,
one over the other, some full-screen some that just let you see the 10% of the
real site, some with a pseudo-pop-up, all with those little "x" almost
unclickable to close them that force you to click on the ad in the end.

And in the "free apps with ads" of the mobile store the situation is even
worse... they'll often try all possible tricks to force you to click on the
ads.

~~~
nsxwolf
Can that really go on forever? I don't know anyone that deliberately clicks on
ads. Ads usually act as a "don't buy" signal to me - I assume the product is
of low quality or a scam because of the skeeziness of how they tried to reach
me as a customer.

Like higher education, the online ads business seems poised to collapse.

~~~
kbenzle
Are you Russian, this is a common sentiment there :)

~~~
PeCaN
I think this is a common sentiment _everywhere_.

~~~
kbenzle
If that was true the US would have A LOT fewer ads.

------
newman314
People were losing their minds over the fact that iPhone shipments slightly
declined. If you look at the year over year growth (excluding the massive bump
for iPhone 6), it would show that AAPL is still ahead of the growth curve.

See [https://imgur.com/vO0kPEy](https://imgur.com/vO0kPEy)

* Apple's quarterly revenue: $75.9bil

* Apple's quarterly profit: $18.4bil

* Google's quarterly revenue: $21.3bil

* Google's quarterly profit: $6.8bil

In sheer numbers, Apple's total profit is quite a bit more than Google's so
there's that.

~~~
mrb
Which pretty much shows that the market value of a company is not based on
what they sell today, but on the expectation of what they will sell tomorrow.

Does Apple do research in biotech (Alphabet's Calico)? Are they developing
drones delivering wireless internet to the world (Google's Skybender)? Do they
have an investment arm (Google Ventures)? Did they start an ISP (Google
Fiber)?

People see Alphabet's increasing outreach that almost seems ludicrous. Then
they compare this with Apple who seems to have been doing iPhones and iPads
for 6-10 years, and doesn't seem to be interested in anything else (though
this is slowly changing with Apple apparently getting into home automation and
self-driving vehicles). It doesn't matter if it is true or not. This is what
people perceive. This is what makes them value Google more than Apple. For all
we know smartphones and tablets could be disrupted by another technology (the
same way PCs were disrupted by phones and tablets) and Apple may not be ready
for this next tech disruption, while Google is placing bets in many other
markets.

~~~
lazaroclapp
Apple's brand trades a lot on having extremely well finished products with
very polished experiences. If they started experimenting left and right like
Google does, they would lose that brand image, which is arguably their most
valuable asset (even above and beyond the technology itself). If Google
releases Glass and it flops, it hardly affects their image ('well, yes, it's
cool technology, that's what Google does, but I don't think people want it for
now...'), if Apple does the same it would be thousands of articles about how
Apple is losing its touch and can't possible survive without Steve Job's
genius.

Maybe the only way around that is taking a page out of Alphabet's playbook and
making a parent company with "riskier" subsidiaries with their own non-Apple
brand?

~~~
samstave
> __ _Apple 's brand trades a lot on having extremely well finished products
> with very polished experiences_ __

I don 't fully agree with this. Did you have the first version of the iPhone?
No copy and paste? WTF.

Antenna signal dropping because "you're holding it wrong!"? WTF.

The only thing you can hold to the apple brand without any criticism is the
industrial design of the packaging and look of their products has been
consistent and un-matched.

There are plenty of UX issues that have arisen that take away from the
___polished_ __experience.

Sure I like their products, but im not deluded to think that they are beyond
reproach.

~~~
marshray
You're making the mistake of thinking other people evaluate products the same
way you do.

How many people do you really think tested the copy and paste functionality on
the original iPhone before making their purchasing decision?

I think almost no one.

~~~
tarblog
I think you're on the right track.

The way I remember it: the product was still overwhelmingly better than
everything else. Missing copy&paste was an "oh well" compared to owning an
iPhone in 2007.

~~~
CydeWeys
And it's not like they didn't get around to adding it. Apple does admit
mistakes. They made their phones bigger too, finally.

------
pearlsteinj
Also interesting to see in this earnings report is that Google's "other bets"
aka moonshots are 3.5 billion in the red...[0]

[0][https://abc.xyz/investor/news/earnings/2015/Q4_google_earnin...](https://abc.xyz/investor/news/earnings/2015/Q4_google_earnings/index.html)

~~~
toomuchtodo
I'd expect years, if not a decade for those to make money.

I'm fond of how Google's voting structure is designed to prevent common
stockholders from changing the direction of the company (for the same reason
Elon Musk won't take SpaceX public until there are ongoing flights to Mars):
investors are too concerned with short-term enrichment.

If all of your ventures are making money hand over fist, you're not trying
anything hard.

~~~
pearlsteinj
I totally agree, this is just the first glimpse we get into the finances of
the moonshots.

------
stephengoodwin
Apple also started paying quarterly dividends in 2012[1]. Whereas, Google does
not pay out dividends[2]. Apple's annualized dividend yield is 2.2% (for
comparison, Microsoft's is 2.6%[3]).

[1]
[http://www.streetinsider.com/dividend_history.php?q=AAPL](http://www.streetinsider.com/dividend_history.php?q=AAPL)

[2]
[http://www.streetinsider.com/dividend_history.php?q=GOOG](http://www.streetinsider.com/dividend_history.php?q=GOOG)

[3]
[http://www.streetinsider.com/dividend_history.php?q=MSFT](http://www.streetinsider.com/dividend_history.php?q=MSFT)

------
aqzman
Very impressive. I remember being a young teenager when Google first went
public, and around the same time my parents were looking at investing a
moderate amount of money (around 10K, if I remember correctly) in the stock
market. I suggested they buy stocks in Google, they didn't take my advice,
which I don't blame them for as taking investment advice from a 14 year old
typically doesn't end well.

It will be very interesting to see where Alphabet/Google go in the next 10
years.

~~~
jcsnv
I remember being in a situation similar to that! Google's $100 IPO price looks
like a steal now.

~~~
tim333
The IPO price was $42.50 per share split adjusted. Which I brilliantly passed
on. I mean how could some search software be worth that much?

------
bane
As an American I think it's pretty badass that something like 8 or 9 of the
top 10 most valuable companies in the world are all American. I'm not sure if
that means we're doing something right, but it's still pretty cool for a
moment.

~~~
arikrak
All 10 of the 10 most valuable publicly traded companies are American
(multinational) companies. #11 is Chinese and #20 is Swiss [1].

(Not that the largest 4 companies are tech companies, so that explains part of
it...)

[1] [http://www.dogsofthedow.com/largest-companies-by-market-
cap....](http://www.dogsofthedow.com/largest-companies-by-market-cap.htm)

~~~
Hermel
This list is incomplete. Nestlé for example is missing
([https://www.google.com/finance?q=VTX%3ANESN](https://www.google.com/finance?q=VTX%3ANESN)).

~~~
arikrak
Thanks, you can view a complete list on Google finance if you sort by market
cap.[1] The top 10 are still US companies though.

[1]
[https://www.google.com/finance?ei=BzuxVqG2ItO5euz2pMAO#stock...](https://www.google.com/finance?ei=BzuxVqG2ItO5euz2pMAO#stockscreener)

------
pbreit
Both tremendous companies. I actually wish Apple would deploy some of its
know-how and capabilities a little more broadly. Not everything has to be an
immediate $20 billion opportunity.

~~~
draw_down
On the other hand, that product stance helps them avoid Google Reader-type
situations.

~~~
pbreit
First, Google abandoning Reader was a terrible decision. Easily worth a PM and
a few devs.

Second, I understand that part of the reason Apple executes well is because it
minimizes distractions. But I believe a well-executing company like Apple
should be able to take on more projects effectively.

~~~
yoz-y
I, for one, am glad that Reader got shut down. Although I was a heavy Reader
user, I think that the RSS ecosystem is better without it. Now we have a
relatively healthy number of aggregating services and third party clients.

For me, RSS is the way informational web should work.

------
dangoor
Interesting that Apple's net profits last quarter was greater than Alphabet's
revenue.

~~~
hyperbovine
How much Google product did you buy last quarter...

~~~
rch
The most interesting part about signing up to Google Contributor has been the
allocation reports. Try it just once on a 'top 10 list of celeb whatever' site
to see how much they make per visitor.

~~~
JorgeGT
According to the sample prices of $2-$10 for 5-50% fewer ads, I guess the
monthly average for each user is $13-$40?

------
iamgopal
The elephant in the room nobody seems to notice is, they have so much data
that they can actually look ahead of curve for any industry or tech, and so
can have very good tactical advantage, and being open to jump in to any tech,
they can steer much easily then the counterparts.

------
whack
Kudos to Google. I'm happy for them. But it's also worth pointing out that
Market Cap is a horrendous way to measure how "valuable" or "powerful" a
company is.

Companies A and B both want to raise $10B to fund a new investment
opportunity. A decides to issue corporate bonds, because it doesn't want to
dilute its shareholders. B decides to issue new equity instead, because they
feel that their company stock is actually overvalued at the moment. Net
result: A's market cap remains the same. B's market cap increased by $10B. No
difference in future projected earnings/revenue between the 2 of them, but B
now leads A in market cap.

Another scenario: Companies A and B both made $20B in profits over the past
year. Company A decides to keep $5B in the bank, and returns the remaining
$15B to their shareholders. Company B hoards all $20B, and doesn't do anything
with it besides letting it sit in the bank. Company A's market cap drops by
$15B because of their decision to issue dividends, and company B's market cap
now leads A, just because they decided to sit on their pile of money.

If you want to judge how powerful a company is, look at its revenue, profits
or total assets. If you want to judge how successful a company is, look at its
investor returns. Market cap isn't really all that meaningful a metric to
judge a company by.

~~~
jedberg
In both cases you describe, the company with the higher cap is the more
"powerful" company though. In example one, they have a lot more control of
their destiny since they have debt and not more shareholders.

In number two they have more control because if an opportunity comes up that
costs say 10 billion, Company B can act on that and Company A cannot.

~~~
whack
> In number two they have more control because if an opportunity comes up that
> costs say 10 billion, Company B can act on that and Company A cannot.

You missed the example completely. Both companies raised $10B, either through
debt or equity, and both of them spent/invested the money immediately. Net
result: both of them have equal amounts of cash in the bank. But one of them
has a market cap $10B higher than the other. Simply because of a tactical
choice they made in financing.

There are minor advantages/disadvantages involved in debt vs equity financing.
However, these differences are all 2nd order effects. At a macro level, they
have remarkably similar financial outcomes. Read up on Modigliani-Miller
Theorem if you don't get this concept.

~~~
jedberg
Read your own examples again. Example two was the one with the dividends.

------
SilasX
Out of curiosity, is there a reason Google/Alphabet shouldn't be on the Dow?

~~~
minimax
Yes. It's because of the idiotic way the Dow formula works. The Dow is a price
weighted index. To compute the value of the Dow, you sum the per-share prices
of the constituents and divide by a magic divisor. So a $50 move in GOOG
(~6.6% change) and a $50 move in AAPL (50% change) would have the exact same
impact on the value of the index. The kludgey solution to this problem is just
to not incorporate high priced stocks into the index.

Incidentally this is why when you hear anyone quoting the Dow you can tell
immediately that they are either clueless or an innumerate moron.

~~~
hodwik
The lower the price the easier to buy, so there should probably be some
weighting on stock-price to remove some weekend warriors from the equation on
many-shared stocks, and to reflect the barriers to entry on stocks like BRK.A.

------
wodenokoto
What was the big jump for Google/alphabet I July?

~~~
Lewisham
IIRC that was when reported earnings from mobile were higher than Wall Street
expected. WS was expecting doom and gloom from mobile for a long time.

------
csomar
So let's see, according to Google Finance. Not quite accurate number, only a
few _billions_ more or less.

Apple Marketcap: $539B

Google Marketcap: $537B

Microsoft Marketcap: $435B

Facebook Marketcap: $320B

Total of these big 4: $1.8 Trillion

Who said the bubble is going to burst this year?

~~~
yannickmahe
What are the P/E ratios of all these ?

------
donohoe
That is AMAZING for a company barely a year old. Kudos to all involved.

------
rjvir
According to Google Finance, it appears that Alphabet has a market
capitalization of $517B, which is far different than the $558B quoted in the
article. This does not appear to be a temporary fluctuation.
[https://www.google.com/finance?q=NASDAQ%3AGOOGL](https://www.google.com/finance?q=NASDAQ%3AGOOGL)

Am I missing something? Based on the current market cap numbers on Google
Finance, Apple is still higher than Alphabet.

~~~
tosseraccount
Need to combine Google/Alphabet share classes.

~~~
dragonwriter
No, the reported market cap on Finance already does that; the after-hours
trading explanation seems the better explanation.

~~~
tosseraccount
"Alphabet shares (GOOGL) jumped 6% after Google's parent reported estimate-
topping fourth-quarter results after the bell. Its _combined share classes_
were then worth $554 billion, surpassing Apple (AAPL), which had a value of
about $534 billion and whose shares were down slightly after hours."

[http://www.usatoday.com/story/tech/news/2016/02/01/alphabet-...](http://www.usatoday.com/story/tech/news/2016/02/01/alphabet-
google-apple-market-cap/79652616/)

Please
note:[https://www.google.com/finance?q=NASDAQ%3AGOOGL](https://www.google.com/finance?q=NASDAQ%3AGOOGL)
and
[https://www.google.com/finance?q=NASDAQ%3AGOOG](https://www.google.com/finance?q=NASDAQ%3AGOOG)

~~~
dragonwriter
Yes, and if you look at the market cap on both of GOOG and GOOGL on Google
Finance, you'll note that they are the same (after close -- during trading
they seem to be very close but slightly different, probably for timing
reasons) and if you do the math, you'll see that for each they aren't
reporting the individual cap but the combined cap.

My first reaction was that the problem was one or the other share class being
excluded, and then I checked exactly the sources you cite and checked the
numbers and realized that couldn't be the problem if.you used Google Finance
reported market caps, because they don't report it that way.

------
wangii
Microsoft reached an intraday high share price of $119.94 in December 1999.
With 5,160,024,593 outstanding shares, it had a market capitalization of
$618.9 billion.

then what? what next?

~~~
adventured
The glaring difference of course being that Microsoft was trading for roughly
88 times trailing earnings.

Google is trading for close to 30 times earnings with this latest quarter.

Google's valuation is obviously sustainable, Microsoft's was not at that time.

What's next? Google is likely to become even more valuable as they have a lot
of growth left and investors clearly like to give them a nice multiple.

------
jfuhrman
Well, abusing their search dominance among other things like making ads
indistinguishable from organic results and paid placement on verticals like
shopping/hotels etc. was eventually going to pay out.

More details on how Google manipulated search rankings manually to make more
money:

From [http://www.wsj.com/articles/how-google-skewed-search-
results...](http://www.wsj.com/articles/how-google-skewed-search-
results-1426793553)

>A previously undisclosed report by staffers at the Federal Trade Commission
reveals new details about how Google Inc. manipulated search results to favor
its own services over rivals’, even when they weren’t most relevant for users.

>In a lengthy investigation, staffers in the FTC’s bureau of competition found
evidence that Google boosted its own services for shopping, travel and local
businesses by altering its ranking criteria and “scraping” content from other
sites. It also deliberately demoted rivals.

>For example, the FTC staff noted that Google presented results from its
flight-search tool ahead of other travel sites, even though Google offered
fewer flight options. Google’s shopping results were ranked above rival
comparison-shopping engines, even though users didn’t click on them at the
same rate, the staff found. Many of the ways Google boosted its own results
have not been previously disclosed.

>One way Google favored its own results was to change its ranking criteria.
Google typically ranks sites based on measures like the number of links that
point to a site, or how often users click on the site in search results.

>But Marissa Mayer, who was then a Google vice president, said Google didn’t
use click-through rates to determine the ranking for its own specialized-
search sites, because they would rank too low, according to the staff report

>Instead, Google would “automatically boost” its own sites for certain
specialized searches that otherwise would favor rivals, the FTC found. If a
comparison-shopping site was supposed to rank highly, Google Product Search
was placed above it. When Yelp was deemed relevant to a user’s search query,
Google Local would pop up on top of the results page, the staff wrote.

>Other regulators have found similar practices. European antitrust authorities
in 2013 said Google had a different, “specialized” search algorithm for
ranking its own content.

>To bolster its own listings, Google sometimes copied, or “scraped,”
information from rival sites. According to the FTC report, Google copied
Amazon’s rankings of how well products were selling, then used that
information to rank its results for product searches. Amazon declined to
comment.

>While Google promoted its own results, it sometimes demoted rivals, the FTC
staff found. For example, Google compiled a list of comparison-shopping sites
and “demoted them from the top 10 web results,” staff wrote. According to the
report, Google users in tests didn’t like the changes; only after Google
tweaked its search algorithm at least four times, and changed the ranking
criteria, did the new results get “slightly positive” feedback, the staff
said.

>Google’s efforts paid off, the FTC found. It said Google’s maneuvers reduced
Web traffic to rivals, and increased traffic to Google sites.

~~~
HappyTypist
Google's purpose is to give users the most relevant results. No Google
algorithm update goes through without users liking it; it doesn't matter how
much profitability it increases.

~~~
tyingq
The parent of your response points to an FTC report (an internal one that was
leaked).

Within that report, they show how Google was able to tweak the questions until
end users stopped liking something they did like with the previous set of
questions.

The questions being tweaked were specifically about a type of site that
competed with Froogle/Google Shopping that Google wanted demoted.

------
mark-r
Am I the only one who didn't realize Alphabet == Google? When did that happen?

~~~
pavanky
A few months ago. They re-organized the structure so that Alphabet became the
parent company and Google became the subsidiary. Larry Page heads Alphabet
while Sunder Pichai heads Google.

Some of the companies purchased by "Google" became subsidiaries of Alphabet as
well.

------
Mkansagra
Let's be realistic for once.

There is no such thing as complete AI. AI means a piece of software that does
whatever you tell it to do, acting like a human. Simply

Artificial = Human made Intelligence = Brain power or thinking power.

~~~
pnut
That may be technically true today, but it feels a little like parents taking
credit for their child's accomplishments.

That distinction means less and less as time goes on, anyway.

After learning from a billion human lifetimes, and being coded by 100,000
humans' combined efforts, would it be such a surprise that something greater
eventually emerges?

------
aresant
"SEO isn't good for users or the Internet at large. ... It's a bug that you
could rank highly in Google without buying ads, and Google is trying to fix
the bug." (1)

That statement is more-or-less the reality of every google-dependent business
in the world at this point - Google is getting better and better at charging
advertisers for their product - everybody is going to wind up paying the
Google tax and this Quarter's results are evidence that GOOG is moving in the
"right" direction to that end.

(1) [http://www.seobook.com/virtual-real-estate-virtually-
disappe...](http://www.seobook.com/virtual-real-estate-virtually-disappears)

------
spectrum1234
Wow these points really show Hacker News is bad at finance :)

------
rijusaini
"If Google disappeared the world would screech to a halt". Yes it would, for
me. Someone please unshackle me.

------
droopybuns
I feel like there are a fair number of reluctant capitalists employed by this
company. I wonder how long they can post these kinds of numbers before
something breaks.

------
dschiptsov
Valuation based entirely on hype and big names, without any released products
or services?

~~~
jaxondu
Precisely why the restructure Google into Alphabet. Market looks for potential
earning. And the various moonshot projects is the marketing way of telling the
market we're the future. R&D in the open is paying off in this sense for
Alphabet/Google. And the market do not see those great potential products
brewing in the labs of Apple, Microsoft, IBM etc.

------
josm
Well I'm not exactly suprised.

------
0xCMP
You're all talking about Google being more valuable as if Apple did not lose a
ton of value since Jan 1 in the scares. Majority of the loss has been in
generalized fear. Google hasn't really done anything to grow past them. They
just stayed where they were and Apple fell below them. Lets please keep this
in mind when we throw around ideas like one is better than the other as a
result of this.

~~~
modelmodel
What were the scares caused by?

~~~
0xCMP
First off, never claiming to understand the whole stock market or being an
expert. I'm am amateur trying to make sense of this. But here is what I know
very tersely (at work, can't write a paper here.)

China is highly leveraged and their stock market was crashing. Their very high
spending is often accepted because of their continuing growth which people
have been assuming was a lie for the past 7(?) years. They always say it's 7%
growth. With a stock market crash people think that maybe people are waking up
that the growth isn't there and China won't be able to sustain much longer.
Thats not good for apparently many far reaching reasons.

Oil is crashing for many reasons which you could speculate about but not know
for sure. The reality for the US markets is that many smaller oil companies
are highly leveraged because oil was so expensive and they were funded with
the idea it'd stay above something like $50/barrel. Their methods are more
expensive than say Saudi Arabia's methods which allow them to sell much
cheaper (although they need revenue which they're offsetting by selling
bonds). Here is where I'm lost a bit, but somehow this is tied to the banks
again who might be in trouble if they all start failing.

Not to mention people have been calling a correction for almost a year now
based on debt levels, global banking issues, global economic issues, high P/E
ratios, etc. to happen sometime around now till next year.

The stock market fear indicators on money.cnn.com[0] were at extreme levels
for several days in Jan. Plenty of issues with fear and emotions in the
markets right now. Some of which are well placed fears.

Apple was going down _a lot_ during those periods of fear well before their
earning call which is what has been sealing the deal. I think during that
major sell off people thought it was the "top" and were getting out.

[0]: [http://money.cnn.com/data/fear-and-
greed/](http://money.cnn.com/data/fear-and-greed/)

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xyzzy4
Good time to short Alphabet? I haven't looked yet but I bet their P/E ratio is
bubble-ish.

~~~
Mikeb85
Maybe, maybe not. I doubt there's much upside, but generally mega caps don't
have much volatility either...

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xyzzy4
I wouldn't count on that. Apple seems to have a lot of volatility lately.

~~~
Mikeb85
Compared to what?

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BorisMelnik
interesting adjective "most valuable." To many that equates to revenue
generated, to others profitability. Haven't read this article but starred for
later I'm curious to see what it says.

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jdmichal
For public companies this is always going to mean market capitalization, which
is the number of outstanding shares multiplied by the share price. This is the
amount that would be required to _instantaneously_ buy all the stock _were it
for sale at the listed price_ and thereby gain 100% ownership. ( _In reality
this never happens, and quickly buying large amounts of a stock typically
elicits an additional premium on top of the list price. Buyouts of public
companies tend to be for a significant percentage higher than the listed
price._ ) So the market cap is _in a way_ , quite literally, the valuation of
the company.

EDIT: Italicized additions. Thanks for the feedback.

~~~
danharaj
It's definitely not the amount of money that would be required to buy all the
stock. The market cap is usually much smaller than that quantity.

~~~
dragonwriter
Which is fairly easily demonstrated by the fact that actual acquisitions of
going concerns are usually at a premium above the market price at the time
they are negotiated.

