This article looks at the historic correlation of the total domestic market capitalisation of the ASX with Australia’s GNP and GDP. It also takes into consideration the potential for the concentration of capital in a few large listed companies to distort this measure of market value.
This is a translated version of a speech given by Li Lu at Peking University in 2015. I am putting this up to preserve it, as it contains far too many important lessons to risk the chance of obscurity or loss over the passage of time. The speech is a distillation of Li Lu’s thoughts and learnings acquired over several decades.