How can 1 US company be worth more than the top 350 UK companies?

wmb194

SneakySpectator said:

wmb194 said:

SneakySpectator said:

wmb194 said:

SneakySpectator said:

IanManc said:

Pathfinder000 said:

........ we are a small country, without any real money and a slowly sinking economy .......  

SneakySpectator said:
........ but yeah it's pretty dead on the island nowadays ........

The UK is the 6th largest economy in the world, and the 9th biggest manufacturer in the world.

However, it has a sizeable portion of its population which glibly talks the UK down contrary to the evidence.

The problem is the companies that make up the overwhelming bulk of our "large economy" are in no growth sectors. Banks, oil, mining etc. 

Just for fun I removed banks, oil & gas, insurance, mining, and tobacco from the FTSE 350 and the market cap drops by 45%. So nearly half of the market cap is made up from those relic companies.

I removed those same sectors from the S&P500 and the market cap drops by just 26%. 

The contrast is undeniable. I don't really mind if the UK stock market is fuelled by high profit no growth companies, but I better be getting a 10% dividend yield as a result.

You cannot think of any companies operating in Britain and for which people work that aren't listed on the LSE?

Of course there are but that same logic can be applied to how many US company operating in the states that aren't listed.

The point is the ones that are listed, are massively dragging down the index with their 0 growth dead end sectors.

So the things you value are happening in Britain but in this thread you've be saying* that 'almost nothing but dinosaur' things happen in Britain... Try some Socratic thinking; can you think of exceptions that you can use to modify your statement?

What are you trying to achieve in this thread? You don't think banking and insurance et al will exist in 100 years' time? If it's an attempt to try to decide where to invest I thought you'd settled that for yourself in another recent thread: 100% in a US S&P500 tracker.

*"The problem is the companies that make up the overwhelming bulk of our "large economy" are in no growth sectors. Banks, oil, mining etc."

The issue isn't how stable the deep rooted the companies are, the issue is how much my money will go up if I invest in them. You will never get tech level returns on oil & gas, mining, insurance, banking etc because these are essentially zero growth stocks.

If I wanted a 4% return per year investment I'd just put it into government bonds.

InvesterJones said:

SneakySpectator said:

IanManc said:

Pathfinder000 said:

........ we are a small country, without any real money and a slowly sinking economy .......  

SneakySpectator said:
........ but yeah it's pretty dead on the island nowadays ........

The UK is the 6th largest economy in the world, and the 9th biggest manufacturer in the world.

However, it has a sizeable portion of its population which glibly talks the UK down contrary to the evidence.

The problem is the companies that make up the overwhelming bulk of our "large economy" are in no growth sectors. Banks, oil, mining etc. 

Just for fun I removed banks, oil & gas, insurance, mining, and tobacco from the FTSE 350 and the market cap drops by 45%. So nearly half of the market cap is made up from those relic companies.

Despite being corrected several times, you're still confusing the economy with stock exchanges.

I'm not, but investors make their money when the index goes up so if the companies are not in the index it's irrelevant.

In the past year or so you'd have done really well in British and continental European banks and insurers. Don't forget to add back dividends when looking at their performance.

I thought you were an all of market tracker investor so why are you trying to pick? Buy an all world tracker or stick with your preferred S&P500 tracker.

SneakySpectator

GeoffTF said:

SneakySpectator said:

The issue isn't how stable the deep rooted the companies are, the issue is how much my money will go up if I invest in them. You will never get tech level returns on oil & gas, mining, insurance, banking etc because these are essentially zero growth stocks.

If I wanted a 4% return per year investment I'd just put it into government bonds.

UK companies tend to pay out big dividends. That comes off the capital growth. If you get 4% dividends with inflationary growth of dividends and capital, you are a winner with 7% total return. There is the alternative of tech stocks with sky high valuations, but they do not have to disappoint much to lose you money. There is also the possibility that Trump will levy high taxes on your US investments, or worse:

https://www.youtube.com/watch?v=2S7gWNxzlvE

I do not know what will happen, so I spread my risk.

I'll watch the video in a bit but take the https://www.ishares.com/uk/professional/en/products/251807/ishares-uk-dividend-ucits-etf index as an example. The dividend yield on that fund is 5.04%. Now subtract the average annual inflation rate of 2.8% and you're left with 2.24% real return per year. 

In what universe is this considered an acceptable return for investing in the stock market? If I'm going to risk my money in the stock market I either want a 5 % - 7% real return per year or a 5% - 7% real dividend yield per year. 

eskbanker

SneakySpectator said:

GeoffTF said:

SneakySpectator said:

The issue isn't how stable the deep rooted the companies are, the issue is how much my money will go up if I invest in them. You will never get tech level returns on oil & gas, mining, insurance, banking etc because these are essentially zero growth stocks.

If I wanted a 4% return per year investment I'd just put it into government bonds.

UK companies tend to pay out big dividends. That comes off the capital growth. If you get 4% dividends with inflationary growth of dividends and capital, you are a winner with 7% total return. There is the alternative of tech stocks with sky high valuations, but they do not have to disappoint much to lose you money. There is also the possibility that Trump will levy high taxes on your US investments, or worse:

https://www.youtube.com/watch?v=2S7gWNxzlvE

I do not know what will happen, so I spread my risk.

I'll watch the video in a bit but take the https://www.ishares.com/uk/professional/en/products/251807/ishares-uk-dividend-ucits-etf index as an example. The dividend yield on that fund is 5.04%. Now subtract the average annual inflation rate of 2.8% and you're left with 2.24% real return per year. 

In what universe is this considered an acceptable return for investing in the stock market? If I'm going to risk my money in the stock market I either want a 5 % - 7% real return per year or a 5% - 7% real dividend yield per year. 

Are you ignoring the capital growth?  Obviously less than low dividend yield payers but not negligible....

SneakySpectator

wmb194 said:

SneakySpectator said:

wmb194 said:

SneakySpectator said:

wmb194 said:

SneakySpectator said:

IanManc said:

Pathfinder000 said:

........ we are a small country, without any real money and a slowly sinking economy .......  

SneakySpectator said:
........ but yeah it's pretty dead on the island nowadays ........

The UK is the 6th largest economy in the world, and the 9th biggest manufacturer in the world.

However, it has a sizeable portion of its population which glibly talks the UK down contrary to the evidence.

The problem is the companies that make up the overwhelming bulk of our "large economy" are in no growth sectors. Banks, oil, mining etc. 

Just for fun I removed banks, oil & gas, insurance, mining, and tobacco from the FTSE 350 and the market cap drops by 45%. So nearly half of the market cap is made up from those relic companies.

I removed those same sectors from the S&P500 and the market cap drops by just 26%. 

The contrast is undeniable. I don't really mind if the UK stock market is fuelled by high profit no growth companies, but I better be getting a 10% dividend yield as a result.

You cannot think of any companies operating in Britain and for which people work that aren't listed on the LSE?

Of course there are but that same logic can be applied to how many US company operating in the states that aren't listed.

The point is the ones that are listed, are massively dragging down the index with their 0 growth dead end sectors.

So the things you value are happening in Britain but in this thread you've be saying* that 'almost nothing but dinosaur' things happen in Britain... Try some Socratic thinking; can you think of exceptions that you can use to modify your statement?

What are you trying to achieve in this thread? You don't think banking and insurance et al will exist in 100 years' time? If it's an attempt to try to decide where to invest I thought you'd settled that for yourself in another recent thread: 100% in a US S&P500 tracker.

*"The problem is the companies that make up the overwhelming bulk of our "large economy" are in no growth sectors. Banks, oil, mining etc."

The issue isn't how stable the deep rooted the companies are, the issue is how much my money will go up if I invest in them. You will never get tech level returns on oil & gas, mining, insurance, banking etc because these are essentially zero growth stocks.

If I wanted a 4% return per year investment I'd just put it into government bonds.

InvesterJones said:

SneakySpectator said:

IanManc said:

Pathfinder000 said:

........ we are a small country, without any real money and a slowly sinking economy .......  

SneakySpectator said:
........ but yeah it's pretty dead on the island nowadays ........

The UK is the 6th largest economy in the world, and the 9th biggest manufacturer in the world.

However, it has a sizeable portion of its population which glibly talks the UK down contrary to the evidence.

The problem is the companies that make up the overwhelming bulk of our "large economy" are in no growth sectors. Banks, oil, mining etc. 

Just for fun I removed banks, oil & gas, insurance, mining, and tobacco from the FTSE 350 and the market cap drops by 45%. So nearly half of the market cap is made up from those relic companies.

Despite being corrected several times, you're still confusing the economy with stock exchanges.

I'm not, but investors make their money when the index goes up so if the companies are not in the index it's irrelevant.

In the past year or so you'd have done really well in British and continental European banks and insurers. Don't forget to add back dividends when looking at their performance.

I thought you were an all of market tracker investor so why are you trying to pick? Buy an all world tracker or stick with your preferred S&P500 tracker.

I'm still 100% in VWRP I'm not going to swap and change anything, I'm just having a discussion to see other people's perspectives and opinions. 

SneakySpectator

eskbanker said:

SneakySpectator said:

GeoffTF said:

SneakySpectator said:

The issue isn't how stable the deep rooted the companies are, the issue is how much my money will go up if I invest in them. You will never get tech level returns on oil & gas, mining, insurance, banking etc because these are essentially zero growth stocks.

If I wanted a 4% return per year investment I'd just put it into government bonds.

UK companies tend to pay out big dividends. That comes off the capital growth. If you get 4% dividends with inflationary growth of dividends and capital, you are a winner with 7% total return. There is the alternative of tech stocks with sky high valuations, but they do not have to disappoint much to lose you money. There is also the possibility that Trump will levy high taxes on your US investments, or worse:

https://www.youtube.com/watch?v=2S7gWNxzlvE

I do not know what will happen, so I spread my risk.

I'll watch the video in a bit but take the https://www.ishares.com/uk/professional/en/products/251807/ishares-uk-dividend-ucits-etf index as an example. The dividend yield on that fund is 5.04%. Now subtract the average annual inflation rate of 2.8% and you're left with 2.24% real return per year. 

In what universe is this considered an acceptable return for investing in the stock market? If I'm going to risk my money in the stock market I either want a 5 % - 7% real return per year or a 5% - 7% real dividend yield per year. 

Are you ignoring the capital growth?  Obviously less than low dividend yield payers but not negligible....

What capital growth? Your only "growth" is coming from than 2.24% real inflation adjusted dividend yield... 

wmb194

SneakySpectator said:

wmb194 said:

SneakySpectator said:

wmb194 said:

SneakySpectator said:

wmb194 said:

SneakySpectator said:

IanManc said:

Pathfinder000 said:

........ we are a small country, without any real money and a slowly sinking economy .......  

SneakySpectator said:
........ but yeah it's pretty dead on the island nowadays ........

The UK is the 6th largest economy in the world, and the 9th biggest manufacturer in the world.

However, it has a sizeable portion of its population which glibly talks the UK down contrary to the evidence.

The problem is the companies that make up the overwhelming bulk of our "large economy" are in no growth sectors. Banks, oil, mining etc. 

Just for fun I removed banks, oil & gas, insurance, mining, and tobacco from the FTSE 350 and the market cap drops by 45%. So nearly half of the market cap is made up from those relic companies.

I removed those same sectors from the S&P500 and the market cap drops by just 26%. 

The contrast is undeniable. I don't really mind if the UK stock market is fuelled by high profit no growth companies, but I better be getting a 10% dividend yield as a result.

You cannot think of any companies operating in Britain and for which people work that aren't listed on the LSE?

Of course there are but that same logic can be applied to how many US company operating in the states that aren't listed.

The point is the ones that are listed, are massively dragging down the index with their 0 growth dead end sectors.

So the things you value are happening in Britain but in this thread you've be saying* that 'almost nothing but dinosaur' things happen in Britain... Try some Socratic thinking; can you think of exceptions that you can use to modify your statement?

What are you trying to achieve in this thread? You don't think banking and insurance et al will exist in 100 years' time? If it's an attempt to try to decide where to invest I thought you'd settled that for yourself in another recent thread: 100% in a US S&P500 tracker.

*"The problem is the companies that make up the overwhelming bulk of our "large economy" are in no growth sectors. Banks, oil, mining etc."

The issue isn't how stable the deep rooted the companies are, the issue is how much my money will go up if I invest in them. You will never get tech level returns on oil & gas, mining, insurance, banking etc because these are essentially zero growth stocks.

If I wanted a 4% return per year investment I'd just put it into government bonds.

InvesterJones said:

SneakySpectator said:

IanManc said:

Pathfinder000 said:

........ we are a small country, without any real money and a slowly sinking economy .......  

SneakySpectator said:
........ but yeah it's pretty dead on the island nowadays ........

The UK is the 6th largest economy in the world, and the 9th biggest manufacturer in the world.

However, it has a sizeable portion of its population which glibly talks the UK down contrary to the evidence.

The problem is the companies that make up the overwhelming bulk of our "large economy" are in no growth sectors. Banks, oil, mining etc. 

Just for fun I removed banks, oil & gas, insurance, mining, and tobacco from the FTSE 350 and the market cap drops by 45%. So nearly half of the market cap is made up from those relic companies.

Despite being corrected several times, you're still confusing the economy with stock exchanges.

I'm not, but investors make their money when the index goes up so if the companies are not in the index it's irrelevant.

In the past year or so you'd have done really well in British and continental European banks and insurers. Don't forget to add back dividends when looking at their performance.

I thought you were an all of market tracker investor so why are you trying to pick? Buy an all world tracker or stick with your preferred S&P500 tracker.

I'm still 100% in VWRP I'm not going to swap and change anything, I'm just having a discussion to see other people's perspectives and opinions. 

That isn't the framing of your OP and your other comments in the thread.

akm2018

SneakySpectator said:

Considering the age of our country and the economic projection we used to have in the early 1900s I'm genuinely shocked we don't have a company that has breached the $1trillion mark yet. 

Can you think of any events in, say, the first half of the twentieth century that might have had an effect on whether or not those economic projections turned out to be accurate? 🤔

eskbanker

SneakySpectator said:

eskbanker said:

SneakySpectator said:

I'll watch the video in a bit but take the https://www.ishares.com/uk/professional/en/products/251807/ishares-uk-dividend-ucits-etf index as an example. The dividend yield on that fund is 5.04%. Now subtract the average annual inflation rate of 2.8% and you're left with 2.24% real return per year. 

In what universe is this considered an acceptable return for investing in the stock market? If I'm going to risk my money in the stock market I either want a 5 % - 7% real return per year or a 5% - 7% real dividend yield per year. 

Are you ignoring the capital growth?  Obviously less than low dividend yield payers but not negligible....

What capital growth? Your only "growth" is coming from than 2.24% real inflation adjusted dividend yield... 

I'm not claiming there's much capital growth, although it obviously varies by timescale, but was simply observing that any like-for-like measurement of investments should be on a total return basis rather than isolating dividends from growth.

Hoenir

SneakySpectator said:

In what universe is this considered an acceptable return for investing in the stock market? If I'm going to risk my money in the stock market I either want a 5 % - 7% real return per year or a 5% - 7% real dividend yield per year. 

First you need to obtain a far better understanding of the stock market, business in general and the wider economy.  There's no give me's when millions of people are attempting to achieve exactly the same thing. The more time you spend investing the less you'll realise you actually know. 

GeoffTF

SneakySpectator said:

I'll watch the video in a bit but take the https://www.ishares.com/uk/professional/en/products/251807/ishares-uk-dividend-ucits-etf index as an example. The dividend yield on that fund is 5.04%. Now subtract the average annual inflation rate of 2.8% and you're left with 2.24% real return per year.

Two problems here. Firstly, it is total return that matters. Secondly, you have picked a rubbish fund. A more appropriate fund is ISF which tracks the FTSE 100:

https://www.ishares.com/uk/individual/en/products/251795/ishares-ftse-100-ucits-etf-inc-fund

That has had capital growth, despite what was a historically poor decade. Investing all your money in one small market does not make much sense. A global tracker is a more sensible investment. The FTSE 100 has outperformed recently (as has the European market), but there is no guarantee that will continue.