A brief perusal of the largest companies since 1999 could provide investors with a heads up where the profitable sectors to invest might be in the future.
Technology companies briefly dominated the largest companies since 1999
The dotcom mania started in 1999 with companies like Microsoft taking a center stage role.
At the peak of the dotcom bubble, Microsoft broke the market capitalization record when it was valued at $583B in 1999. That is equivalent to $931B in today’s money, inflation adjusted.
Other technology companies rode the technology wave with the likes of Cisco taking the third position of the largest companies with a market capitalization of $353B in 1999.
GE came in at second place with a market capitalization of $504B in 1999.
Analyzing the largest companies since 1999 reveals a spectacular fall from grace from one of the US’s most prized companies
Who would have thought that the US’s second most valuable company by market capitalization, GE would be fighting to avoid becoming a junk bond name just two decades later?
GE’s investment grade bonds trade like high-yield debt, as the market bets it will continue to deteriorate and could end up with a junk rating.
GE is a story about the rise and fall of an Empire as it slowly becomes broken up and sold.
GE has also been forced to cut its dividend in half last year for the second time since the Great Depression
Perhaps GE symbolizes the negative impact of globalization, technology transfer, ineffective management and the gutting of a once great manufacturing nation.
Keeping with the theme when we start analyzing the largest companies since 1999 Exon mobile was the fourth largest with a market capitalization of $283B followed by the US retail giant Walmart with a market capitalization of $283B in 1999
Back in 1999, the mobile telephone market was also heating up with Nokia dominating the global mobile phone market valued at $197B.
Not so long ago the Finnish mobile giant controlled 41% of the handset market but the company failed to keep up with the smartphone revolution. Nokia eventually sold its ill-fated business Nokia mobile business to the software giant Microsoft 2013.
What becomes apparent when analyzing the largest companies since 1999 is that tomorrows winners are leading the pact in product innovation today
These stock leaders are not displaced by disruptors, instead, they become the disruptors, thereby extending the product life cycle of their product.
Analyzing the largest companies since 1999 post-bubble 2004 and the landscape changes
We see the demotion of technology companies in terms of market capitalization.
In 2004 GEC was the world’s largest company with a market capitalization of $319B. The oil giant EXON $283B market capitalization, Microsoft took third place at $282B. The pharmaceutical giant came in fourth place with a market capitalization of $270B. Walmart slides down to sixth place with a market capitalization of $240B.
Intel the hardware technology company was valued at $184B.
The Insurance giant AIG, American International Group (AIG) was flying high until it collapsed during the 2008 financial crisis, In the end, AIG needed a $180 billion taxation bailout to keep it afloat.
Analyzing the largest companies since 1999 post-bubble 2004 brought into the equation a new factor to investing, the idea that a company was too big to fail
Banks also fell into this category of too big to fail.
Today a number of investors are betting that Europe’s largest bank, Deutsche Bank is currently too big to fail. The view is that should DB fail it would create a systemic risk so the European Central bank will provide liquidity to keep the financial entity afloat.
The globalism penny drops when analyzing the largest companies since 1999 up-to-the financial crisis of 2008
The rise of China becomes apparent with the world’s most valuable company no longer being American. Petro China wins the trophy coming in at first place with a market capitalization $367B. The company even briefly surpassed the $1 trillion market capitalization threshold in 2007.
Microsoft was the only technology company valued at $212B, coming in at fourth most valued company in 2008. Walmart’s value continued to slide with it’s market capitalization falling to $189B in 2009.
The largest companies since 1999 and up to 2014 are the last years that oil companies make the list with Apple taking top place as it’s market capitalization reaches $560B.
The launch of the iPhone in 2007 helps complete Apple’s turnaround, eventually making it the most valuable company in a very short space of time.
So Apple becomes the world’s first private sector company worth one trillion dollars. That makes the company worth more than the economies of, for example, Saudi Arabia, Switzerland, and Taiwan.
Nevertheless, big oil still manages to take second place with Exxon being valued at $432B.
But by late 2014 the oil price collapses and by 2019 the no company in the oil sector makes it to the top ten list of largest companies since 1999
The largest companies from 1999 to 2019 are currently dominated by the big tech era
Microsoft has taken back the lead with a market capitalization of $1 trillion in 2019. Amazon is coming in at a close second valued at $943B, then Apple comes in third with a market capitalization of $920B. Moreover, in recent years, Chinese technology companies Tencent and Alibaba have seen their value expand in this new tech era. Watch the capital flows.