Apple is the greatest company of all time because their core product, the iPhone, satisfies a basic human need - communication. Other than nourishment and shelter, communication is one of the most fundamental human needs. Apple is a $3 trillion dollar company because they make communicating amongst friends, family, and colleagues seamless.
I like to assess companies from the lens of human need.
What basic human need does Microsoft's core product, the Microsoft Suite, satisfy? Productivity. The world is built from labor, whether it is forced or not. Contractual agreements, presidential speeches, and term papers, are each written and processed with Microsoft Word. Executive presentations are curated with powerpoint, and much of Americas classified data is secured and organized in Microsoft Excel sheets. I cant speak for other countries but in the United States of America, the largest economy in the world, we use Microsoft to process work related tasks.
Saudi Aramco, is an oil and gas conglomerate supplying fuel to most of the world. Fossil fuels remain the number one source of energy in the world. There is no coincidence why they are a trillion dollar company as well. Energy and time, are the most valuable non-tangible assets, as you need these variables to generate cash. Therefore, a company that is in the business of extracting and selling liquid energy at massive scale is extremely valuable.
Alphabet Inc., formerly "Google," is a trillion dollar firm because they mastered how to organize data. Data should be viewed in the same vanity as oil; data fuels most of the technologies we interact with. When you organize data you have the ability to make insightful and well informed decisions. It allows one to target their marketing, or offer marketing insight to others.
Before I buy a stock I ask myself, "Does this company satisfy a basic human need?"
People control value.
Investing can be as simple or complex as one wants it to be. Identifying the companies that solve human problems is a great start in investment analysis.
The valuations below are as of July 31, 2023 @ 6:50 PM.
Meta Platforms, Inc - $816.5 billion - Social networking/interaction/media.
Walmart - $430.5 billion - Basic household goods.
Nike - $169.7 billion - Athletic footwear and apparel.
NVIDIA - $1.154 trillion - Artificial intelligence /Data processing.
Amazon - $1.372 trillion - EVERYTHING.
I could keep going but I think you all get the point...
- Malc Pe$o