In 1988, eight of ten of the world’s biggest companies by market capitalisation were Japanese.
In 1989, Japan accounted for 40-45% of the world’s stock market capitalisation.
So the sound investor would have invested accordingly back then?
To be clear, my reference to GDP was just a thrown in above to make or provide a (simplified) point for discussion and reference. It wasn’t intended as suggestion for best way to proceed.
…wherein the revenue exposure chart correlates well (but unsurprisingly) to the share of markets of the world’s GDP.
It is a good point. Still, it’s not like every developed-market company would or could just be globalising their activities and revenue sources. Due to various factors, be them cultural, economic protectionism (think China) etc
On the other hand, given a trend of globalisation as suggested, I would assume market capitalisation and revenue exposure (left and right charts) to converge further, at least to some degree. Especially by (today’s) emerging market companies increasing their market capitalisation.
But that might go both ways. For instance, Apple’s continued dominance as the world’s most profitable smartphone marker and world’s most valuable company, or Amazon’s as a retailer (and logistics and cloud computing company) is certainly not guaranteed, in a ten- or fifteen-year outlook.