It is fascinating to compare today’s list of the largest companies in the world (by market cap) with a similar list from a little more than 20 years ago.
As the economy moved from heavy industry to consumer goods to technology over the past two decades, there has been an unmistakable shift in the list of the world’s largest companies, as new industries have emerged.
In addition, it is remarkable that five companies are so close to joining The Trillion Dollar Club – although Facebook shaved over $120 billion in market cap when it reported lower-than-expected quarterly results on July 26, 2018 – but that’s another story.
Let’s review the list of the world’s largest companies by market cap (remember, market capitalization is calculated from the share price multiplied by the number of outstanding shares).
Second Quarter 2018
Alphabet Inc. (Google)
Fourth Quarter 1996
Royal Dutch Shell
The Coca-Cola Company
Poor General Electric
Did you know that besides being the largest company in the world in 1996, General Electric was among the Top 5 largest companies just 10 years ago and was in the Top 10 as recently as the fourth quarter of 2016?
Alas, in June 2018, General Electric – the last of the 12 original companies remaining in the Dow Jones Industrial Average – was given the boot and replaced by Walgreens. Although it was removed from the Dow for 6 months in the 1890s and from 1901-1907, GE had been a continuous member of the Dow since 1907.
So, does anyone really think that bigger is necessarily better?