You Think You're Rich Now

 A user asked r/geography, "Why is the modern Mediterranean so poor compared to the historical one?"

The simple answer (not mine, unfortunately): "The world got bigger."

Mediterranean sea-faring is literally the stuff of legend, and they lived large off it.

The rest of the world caught up and overtook them. Atlantic trade became bigger than Mediterranean trade. Now we have Pacific trade with container ships.

It's not like they went backwards. They remained rich through the Byzantine and Ottoman periods, and even now, modern Greece has all the conveniences of the first world. It's laudable that the ancient world held onto its share of world GDP. A fraction of exponential growth is still exponential growth. But they could not match the sheer scale and abundance of industrial powerhouses with access to bigger seas.

Something similar can happen with companies.

In 1980, Philip Morris the tobacco company was the fourth largest company in the US. After 2005 it did not rank in the top ten.

What happened to it? Did it get cancelled?

Nope. It's still ticking along, now selling vapes instead of cigarettes. Long term shareholders would still be in the black.

It got overtaken by other companies like Amazon and JPMorganChase that could sell more things at higher margins to more people.

High market concentration and valuations can be framed as the risk that winners and prices are poised to fall. It's understandable because "what goes up must come down" has a symmetry that resonates.

However, because concentration and valuation are ratios, there is an alternative, converse risk that losers and earnings rise.

The market gets bigger as we get better at making, selling, and shifting stuff.

Which can increase your ability to acquire non-financial wealth in counter-intuitive ways.

The Koh-i-Noor diamond passed through empires in modern-day Afghanistan, Pakistan, and India, before becoming part of a land treaty with the British Empire. It is now one of the Crown Jewels.

It is a Type IIA; devoid of Nitrogen impurities, and 106 carats.

You could theoretically order a lab grown molecular-identical twin for $100,000 - $300,000. Less than the cost of an apartment in most major cities.

If you think you're rich now, then good news, history says you're likely to get richer.

Though perhaps not as fast as everybody else.