So with that little bit of marketing background, I want to move to this whole business of what we really, really think marketing is. And that brings me into a discussion of intangible assets because the discrepancy between market and book value shows that what accountants don’t measure and then surely investors do. So with that in mind, let’s just have a look at what happens.
Now this you will recognize instantly as a balance sheet, now a balance sheet is without a shadow of doubt the most useless document ever invented by mankind, it was invented in the industrial revolution. The great industrial age when most of the assets that we had worked tangible. So it had some credibility in those days but I’m afraid today it just doesn’t hold water. And of course if you look what a balance sheet says, it says this is what we own and that source is a finer isn't and guess what it balances which is why you call it a balance sheet.
And when you're doing accounting exams, I don’t whether anybody in this room ever has but when your accounting exams it never balance this in the exam well that’s easy just put something on which ever side makes it balance and you will get 50% I've done it myself. But don’t tell the examiners right respectively, all right.
And of course somebody comes along and says “I’ll give you a hundred million for it” and the first thing you do is you say “Don’t be stupid, you don’t believe this garbage here, you don’t believe that. I'm not letting you have it for a hundred million” so you argue and argue and argue and eventually you settle on 900 million. The problem we got now ladies and gentleman and is guessing what it doesn’t balance anymore all right. Now I want to you to watch everybody in the room and those who are watching this video you can time me if you like how quickly I can make it balanced, whoops it balances you see you got it now there it is, it balances. All I’ve done is I've start something in there called it goodwill and guess what, it balances.
Now if you were in NBA class I would ask what on earth you think that goodwill is. What do you think it is? And the answer really is it it's the only thing you’ve got that has any value. This things up here are worthless always have been and always will be when Nestle bought Round Trees they weren't after a factory and New York were they, and I remember ones I better not mention the names because I don’t know how many people are going to be watching this video. But I was an expert witness for a famous soft drinks that took it’s brand away from another soft drinks company and they didn’t like it—so they got expert witnesses and swear affidavits in court. But there was an act of court settlement and the day they took the brand name away from this company guess what, it's factory lines were idle it's liners were empty, costumer stopped buying and yet those with the things that were in the balance sheet.
And if you go to parts of Western Europe certainly parts of the United Kingdom you will see empty factories, you will see empty offices and somebody so called assets, assets really are not assets until you get in there and understand what this funny thing that we called goodwill really, really means. And that I’m saying to you it’s all you’ve got that means anything.
Now we I’m happened to be amongst other than chairman of grand finance and we do the branding evaluations for lots of the biggest companies in the world. Now we've looked at if you just look at this, we've looked at $31.6 trillion worth of stock market value and that’s all you really need to know to get scale of the evidence that we've got. And if you look at this bars because I didn’t want to draw your attention to one of this which is in the United States of America 87% of corporate value is intangibles. That’s means that land of building and things like that any 13%, in the United Kingdom ladies and gentlemen it is 85% of corporate is in intangibles.
Now let's say you can have a look at the others, you know the piece of your own home or wherever you're looking at this clip of a video.
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