The Incredible Shrinking Stock Market

Investopedia | 1/11/2017 | Mark Kolakowski
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Even as the American economy grows, many average investors are losing opportunities to own a piece of it. The number of public companies plunged by 37% to 5,734 as of June 2016 from a peak of 9,113 in 1997, according to the Center for Securities Research at the University of Chicago, as reported in the Wall Street Journal.

In fact, today the U.S. has roughly as many public companies as in 1982, yet real gross domestic product (GDP) is about 2.6 times greater, according to the Federal Reserve Bank of St. Louis. Partly due to mergers, the size of the average public company is now over three times what it was in 1997, even after adjusting for inflation, according to the University of Chicago data cited by the Journal on January 6.

Market - Dying

Is the Public Market Dying?

Writing for the website Seeking Alpha, investment advisor Louis Navellier looks at the same Journal article and makes the provocative claim that “the overall U.S. stock market is slowly dying and will continue to ‘melt up’ on order imbalances due to persistent inflows from the ETF, mutual fund, and pension industries into a shrinking share base.” He points out that aggressive share repurchases by companies are another key contributor to the shrinkage of available shares.

Technology - Industry - Importance - Companies - Funding

The technology industry illustrates the growing importance of private companies and private funding, which is also narrowing opportunities for average investors to participate in this sector. Data from Dealogic indicates that there were only 26 tech IPOs​ listed...
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