$1 Trillion Joke | Market Cap (Short)

We're gonna talk about the Apple one trillion dollar market cap and explain why this is such a silly number, and it's actually based on false math. The problem is this formula for market cap, the math here, if you just multiply the spot and shares outstanding, sure that comes out to this number. But the problem is there's no logic behind it, or there's a seriously flawed logic behind it.

Okay, and here's why: the total number of shares outstanding Apple has is four point eight billion dollars. Now, you second ok, when this one trillion dollar market cap was attained, only sixty million of those shares of four point eight three billion shares was actually traded.

The price from these sixty million shares is being applied to all four point eight billion shares, when 98.8% of those shares were never even traded. But the reality is this price is actually attained with one or two, or just a handful of transactions. It could literally be as little as just one share. Okay, and that one share for that one price can be applied to all four point eight three billion shares.

You guys can see a little bit of a problem with that already, I'm sure. So let me give you a more vivid example: on August 2nd, the number of shares four point eight three billion times 208 equals one thousand and four billion dollars. Now, let's say the next day I go to the market; I buy just one share for two hundred and ten dollars.

Okay, just one share, so I contribute two more dollars to this number. Alright, what does that do when I just contribute only two dollars because I'm only buying one share? Well, that would basically make Apple's valuation go to one thousand fourteen billion.

So meaning people who are holding Apple stocks in their 401k and their stock accounts, all of them will actually see a total gain of ten billion dollars, even though I just contributed two freakin dollars more into the market than the previous price. You see how that's how messed up that is?

This bleeds into other areas in finance, other formulas that are used to, because this is such a fundamental thing now. It’s math, okay, for the market cap. Yeah, because that's how they calculate it. I'm not saying, you know, that they didn't multiply correctly or anything.

The problem is you shouldn't apply this price on all the shares, when really this is just like one share, and there's a serious disconnect in the logic they use. There's also debunked myths that people will think, "Oh, well if I have stocks I can just go to the market tomorrow and sell them." Everyone thinks that, "Oh yeah, I'll give a stock; I could just cash out tomorrow."

No, you can't. If you actually pay attention to how many… how everyone who is holding that thing at, but every single day only that's actually being traded, so that's that. Now you can go out there and literally embarrass and destroy the lives of many finance professors.

I'm not the one that can make anyone's money disappear, because, yeah, I just don't have that power. If you have money, I'm not that guy; I have no power to make it disappear.

Okay, but what I can, of course obviously do, is point out that you don't have any money in your portfolio. Point out that Apple is not really worth one trillion dollars as they miscalculated earlier, and that's the extent of my power. But trust me, that's pretty darn powerful.

And now you all have the power to do that as well.