"At the height of its power, the photography company Kodak employed more than 140,000 people and was worth $28 billion. They even invented the first digital camera. But today Kodak is bankrupt, and the new face of digital photography has become Instagram. When Instagram was sold to Facebook for $1 billion in 2012, it employed only 13 people."
That's from tech guru Jaron Lanier's book, "Who Owns the Future?" Apple, one of the largest corporations in the world, is worth about $500 billion but employs only 80,000 people. That's around half the people working for Kodak at its peak, even though, financially, Apple is 18 times bigger.
Ford and GM are each worth about one-tenth what Apple is, but they each employ more than twice as many people. Yet those figures are misleading. They don't include the people who work in the dealerships and sell the cars. They don't include the people who make the tires and the hubcaps and the assembly line robots; the people who build the highways and make the stoplights, and on and on and on. There's a difference between an auto company and an auto industry.
The same is true of high-tech companies. Accidentally smash a brand-new $399 smartphone by, say, dropping it from the top of a concrete staircase at a minor league ballpark when I, uh, I mean when you pull it out of your pocket and it slips through your nacho-greased fingers, and you can't help but wonder who made all those tiny pieces and if there's some possible way to put them back together again. (FYI: No.)
I bring this up because every night as the news seems to get worse and worse -- wars, rumors of wars, natural disasters, violence, unrest -- you'll hear a newscaster report that "the stock market was down today because of jitters about unrest in the Middle East." Or Ukraine. Or Ebola. Or floods or fires or drought.
Really? When has there not been unrest in the Middle East? How is bad news going to affect your stocks? Are people going to stop using Facebook and Twitter because there's fighting in the Middle East? On the contrary: Their traffic goes up in times of great crisis. Are people going to stop using their cellphones? Same story. Are they going to cancel their Netflix subscriptions and stop going to Starbucks? Are you going to stop buying your kids new school clothes because of the fighting in Ukraine?
If you give it some thought, stocks should really only go down if love and peace and good health broke out all over the world. That would really cause a crash. All the defense contractors would go broke, their workers would be out on the streets, and the nightly news would be wall-to-wall cat videos.
Wall Street goes up and down all the time, but if someone says they know why the market is up or down today, they are either a liar or a fool. Because if they really knew, they'd be rich.
Contact Jim Mullen at JimMullenBooks.com.