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Strategies & Market Trends : Gorilla and King Portfolio Candidates
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To: Mike Buckley who wrote (20700)3/19/2000 12:18:00 PM
From: saukriver  Read Replies (3) of 54805
 
Law of Large Numbers--Multi-Trillion Market Caps?

Mike,

Your post really asks the extent the law of large numbers (cos. can't grow as fast from $250B to $500B as they can from $5B to $10B) is undermined by networking effects. Is there an easy way to find the market cap for gorillas MSFT and CSCO circa 1991 and the companies with the highest market caps in 1991? The current market caps for CSCO and MSFT no doubt looked impossible measured against the highest market cap companies at that time.

We have no problem today contemplating a company growing to a market cap around $500B. To what extent will that appear more common as a number of companies grow to that level and the playing field of the highest market-cap companies shifts to $1T-$2T-$3T?

BTW, I have a hard time seeing Microsoft growing to a $2T market cap company because I have a hard time understanding where it wants to go today. It appears to be more of an annuity of desktop OS royalties attempting to turn itself into an ICGE-type holding company for a series of investments. Some of Microsoft's investments (the splashy $5B preferred stock with/loan to AT&T announced at the time of AT&T's acquisition of Media One for which T gave no commitment of exclusivity) appear ill-considered. OTOH, Cisco has a better sense of the challenge in front of it and what it needs to do.

saukriver
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