“An investment in knowledge always pays the best interest.” The US $100 bill that has featured the portrait of American founding father Benjamin Franklin for over a hundred years has lost 9% of its value in the last 12 months. In the same year, the University of Pennsylvania’s Wharton School of Business announced median base salaries for the MBA Class of 2022 that jumping 12.9% to a school-record $175,000.
Compare that to Tesla stock, which has lost more than two-thirds of its value in 2022. From a market cap of over $1 trillion in December 2021, the electric-vehicle maker’s market valuation has shrunk to roughly $345 billion and cost Tesla its position among the 10-highest value companies in the S&P 500 Index.
So what advice would Ben Franklin, a polymath who in addition to founding what was to become the University of Pennsylvania was also an active writer, scientist, inventor, statesman, publisher, philosopher and kite flyer, have for today’s investors – prioritize education or the stock market?
“The only thing that is more expensive than education is ignorance.” Franklin laid out the earliest known description of the Pro & Con list, now sometimes called a decisional balance sheet. His technique was to divide a sheet of paper into two columns, listing the pros in one column and the cons in the other.
If he were to create two lists of the world’s leading universities and the world’s most valuable companies he would notice over time how consistently Harvard, Stanford, MIT, Oxford, Cambridge, CalTech, Berkeley, Princeton and Yale – let’s call them the U9 – dominate university league tables compared to the ever-fluctuating Fortune 500.
When the Academic Ranking of World Universities, also known as the Shanghai Ranking compiled the first global university ranking in June 2003, the biggest companies by market cap were GE, Microsoft, Pfizer, ExxonMobil, Walmart, Citi, BP, J&J, AIG and IBM.
A year later QS Quacquarelli Symonds published their first World University ranking with the same top institutions from the East and West Coasts and the UK. But J&J and IBM had already made way for Bank of America and HSBC among the largest public companies.
Seven years later, Times Higher Education launched the THE World University Ranking, with Imperial College London joining the U9 to round out the list of the world’s top 10. Compare that to stock market caps in October 2010, when Microsoft was the only firm still in the top 10. Say goodbye to GE, Pfizer and Walmart and say hello to Steve Jobs, Warren Buffett and China. The top 10 reads ExxonMobil, PetroChina, Apple, Petrobras, ICBC, Microsoft, BHP, China Construction Bank, China Mobile and Berkshire Hathaway.
And here we are at the end of 2022. Though there are more than fifteen global university rankings, including league tables based on social and economic impact, scientific papers, human resources indexes, innovation and… teaching, there are four major global rankings – ARWU, QS, THE and US News – whose most recent results have been aggregated into the BlueSky Ranking of University Rankings 2022/23. Each ranking uses a distinct methodology and measures different things with the inherent limitations of each assessment, so doing particularly well in one ranking and less well in another is reflected in the overall performance.
You can view the results for the world’s top 100 universities here. But to update Ben Franklin’s lists here is the top 10 for 2022/23.
The U9 of Harvard, Stanford, MIT, Oxford, Cambridge, CalTech, Berkeley, Princeton and Yale are joined by Columbia. With methodologies that rely heavily on academic reputation, research and citation very little has changed at the top of the leaderboard in the past 20 years.
But as you look through the rest of the top 100 you see the continued excellence of UK and Australian universities that nevertheless face increasing competition from China, The Netherlands, Germany and France.
And what about the world’s most valuable companies? Though Apple is a long way off the $3 trillion market cap it hit at the beginning of this year, it is at the top of the list at the end of 2022, followed by Saudi Aramco, Microsoft, Alphabet (Google), Amazon, Berkshire Hathaway, United Health, J&J, ExxonMobil and Visa.
It is certainly easier to predict which universities will top the rankings than where Tesla’s stock will head in 2023. Market caps based on price to earnings ratios and projected earnings have to navigate inflation woes and interest rates, the impact of war and health crises, supply chain worries and exchange rates.
So stay safe and invest in your own knowledge and education. After all, Benjamin Franklin reckoned that “the great part of the miseries of mankind are brought upon them by false estimates they have made of the value of things.”