The attraction of "big names"

 In China, there are three big names, "BAT" (Baidu, Alibaba, and Tencent); in the West, there are several big names, such as Google, Apple, and Amazon. These big names do not only play their important roles in our ordinary life (we are buying their products and services, some of us are also hired by these companies), they also attract lots of attention in the global financial market. When their roles played become more and more important as they are growing bigger and bigger, they will attract more and more resources that will help them to grow even larger. Under such circumstance, investors should only buy those big names in their fields, as they will be the least likely to lose out and bankrupt in their fields.

If this rule becomes a rule for everyone, what we will see in the financial market is that the big names will seek all attention of investors and their share prices will skyrocket, and the share prices for small companies will drop to their book prices or even lower. Then the fate of small companies is to wait for the big ones to come to acquire them. Then the large companies will grow larger and faster. There is no room for small companies in the stock market. Although large companies do not gain revenues from share price rises, given their investors are potentially their consumers and lenders, their businesses would gain lots of support from their shareholders and it is also their shareholders' interests to keep the companies succeeding over and over again.

This does not happen in the real world; however, if people find that big companies are able to deliver higher returns in the financial market than other companies with lower risk, then they would like to invest in big companies comparing with small companies. Recent years, we have seen that big and popular companies have set records for their companies' capital values; if this heat goes on and on, it is not surprising to see more investors investing more in the big names, and the reality could potentially be very close to the hypothesis suggested above.