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Want to feel good about America? Take a look at the worldwide stock market

I’m sitting under the thatched roof at Austin’s Hula Hut restaurant. The day could not be better. The Hula Hut is perched over the water, upstream from Lady Bird Lake. It’s far from the traffic noise of downtown Austin, bathed in what must be generations of laidback light.

There is an old, funky, laid-back, slacker Austin. And there is a new high-tech, nerd/engineer Austin. The Hula Hut definitely falls in the pre-nerd era. It’s the kind of place that makes you take a deep breath and say, “Life is good.”

But it’s not all fun and games today.

A friend of mine who’s in town for a Dimensional Funds conference slides a ring-bound book across the table. It’s the Matrix Book 2022, the fund firm’s annual book of compound returns for different asset classes.

In other words, it’s a book full of numbers.

Pick an asset class. Then pick a starting date and an ending date. Slide your fingers down the page to the appropriate cell in the matrix. And … zap, there’s the annualized compound return over the period.

Yes, this is less than thrilling for lots of people. But I’ve always loved this book.

It functions, for me, as I imagine another book functioned for my father. When he served on the destroyer escort USS Lloyd E. Acree at the close of World War II, he had a copy of Smoley’s Logarithmic Trigonometric Tables, better known as Smoley’s Tables. I inherited the book in 1958, just days before I started school at the Massachusetts Institute of Technology.

But today it’s not the tables in the Matrix Book that capture my attention. It’s a two-page picture spread with squares and rectangles of different sizes arranged in an odd pattern, like something Piet Mondrian might have done but with less color.

As pictures go, it’s definitely worth more than a thousand words. The illustration is called “World Equity Market Capitalization”— the total value, in dollars, of stocks in countries around the world. Each shape represents the market capitalization of a country. The total value of all those markets clocked in at a stunning $87 trillion at the end of last year.

Dimensional Funds' Matrix Book 2022 is its annual survey of investment performance. This...
Dimensional Funds’ Matrix Book 2022 is its annual survey of investment performance. This page shows world market capitalization.(Dimensional Fund)

World markets

In a quick scan you see what you expect to see: The U.S. stock market is the Big Kahuna. Valued at $52.7 trillion at the end of 2021, its gray blot dominates the two pages. The blot is twice the size of all the other developed markets. And it’s five times the size of all the emerging market countries combined, including China.

But there is something inside the big gray square of our U.S. market cap. It’s a square made with dotted lines.

It says, “Apple, $2,913 B.” That’s billions or, for brevity, $2.9 trillion. As those Mondrian-like squares and rectangles go, it’s very big.

In fact, if Apple stock were a country, it would rank fifth, only $100 billion behind China. Apple’s market value alone is nearly 10 times the value of the entire Russian stock market.

The chart is from last December, so of course it’s ancient history. Now, according to the Morningstar website, Apple is down to about $2.2 trillion. Everything else is down, too, and some far more. Russia, deservedly, is down 49%.

Apple, by the way, isn’t the only mega stock in the U.S. market. It is followed by Microsoft (now $1.7 trillion), Alphabet (now $1.16 trillion), Amazon (now $930 billion) and Tesla (now $609 billion). Each of these companies has a market value that would rank very high — top 20 or better — against the stock markets of entire nations all over the planet.

What does all this mean?

It’s about a lot more than money.

It’s a message about America. About creation and opportunity.

America is already great

I get tired of hearing “Make America Great Again.” America was great at conception. It has been great for generations. America is great now. It still falls short of its ideals at conception, but we keep trying.

In a world that is still trying to extinguish the divine right of kings after thousands of years, it’s too early to consider our concept a failure after a mere 250 years.

America will be great in the future — even with the usual warts, bumps, embarrassments and big mistakes every step of the way.

Say what you will about our flawed past, our problematic present or our uncertain future, America is still the best place to be. And America, so far in history, is the best we very flawed humans have managed to do.

That’s as good as it gets.

The really great thing is that so many of us still believe that we can do better.

We can all be thankful for that.

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