Tuesday, November 18, 2014

How big is BIG?

I’ve found that people have trouble with large numbers.  I don’t mean numbers up to one million.  I think everyone has some frame of reference to what a million is.  For example, a high-end Mercedes costs about $100,000.  So I could buy 10 of them with $1,000,000.  I could also buy three $330,000 homes for $1,000,000.

But I’m not talking about one million…

With all the yada yada about Baker Hughes and Halliburton going on, I thought I’d put things into perspective—into terms and analogies most folks can grasp.

Baker Hughes has a market cap of $27.5 billion.  Market cap…or market capitalization…is the total dollar market value of all of a company's outstanding shares.  It’s a pretty easy number to calculate, but the calculation is irrelevant to this post.  The $27.5 billion is what I want you to keep in mind.

Now let’s look at Halliburton.  It has a market cap of $41.1 billion.

If I add the market value of BHI and HAL, I end up with a total dollar market value of $68.6 billion.  Sounds like a lot of money, right?

But exactly how big is $68.6 billion?  Well, I know it’s this big:

That’s pretty big.  But it really doesn’t put things into perspective.

To help wrap your head around $68.6 billion, let’s consider the $100,000 Mercedes I mentioned earlier.  With $68.6 billion, you could buy 686,000 of them.  That is not a typo.

What about the $330,000 house?  Turns out you could buy 207,878 houses if you had $68.6 billion.  If you lived to be 80 years old, you would have to visit seven of your houses every day of your life to see them all.

Or how about this? The average person's stride length is approximately two-and-a-half feet long.  That means it takes more than 2,000 steps to walk one mile.  If you were to take 68.6 billion steps, you’d walk more than 34,300,000 miles.  To put that into perspective, the distance around the earth is 24,859.82 miles.  If you took 68.6 billion steps, it would be like walking around the earth 1,380 times.

What if I gave you $68.6 billion in one-dollar bills?  If you counted $1 per second every second of every day (no breaks…just counting 24/7), how long do you think it would take you to count all 68.6 billion one-dollar bills?

[insert dramatic pause here…]

It would take you more than 2,175 years to count them all.

And let’s say as you were counting all of the one-dollar bills you stacked them neatly on top of one another.  How high would a stack of 68.6 billion one-dollar bills be?  Well, you’d need quite a ladder to stack them all, because your stack of one-dollar bills would be more than 3,789 miles high.  Yes, miles.

And if you didn’t want to stack all the money, you could give it away.  If you had $68.6 billion, you could give every person in the world…and I mean all 7.125 billion people on the earth… $9.63.

Just give me a $10—you won’t have to count ones…and what’s 37 cents in the grand scheme of things anyway?

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