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Patrick Boyle · Yesterday · 23 min

Where Have All The Stocks Gone?

The Private Capital Industry Soars Beyond $7 Trillion Over the past twenty years, the number of companies listed on the US stock market has almost halved. The world’s largest, most liquid public equity market would appear to have lost its shine. Institutional investors have been piling into private markets instead, in particular venture capital, private equity and private debt. The Financial Times reported last week that the size of the private capital industry has now reached $7.4tn, fifteen times the size it was in 2000. The industry is expected to reach $13tn in the next four years. On top of this, a boom in share buybacks, where companies purchase their own stock as an alternative to paying dividends, has further reduced the number of shares outstanding from the remaining public companies. Historically low interest rates have compounded the trend, tempting companies to raise cheap debt rather than to sell equity. So what has happened to all of the stocks and what should investors do? Steven Davidoff Solomon Paper https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2400488&rec=1&srcabs=2310441&alg=1&pos=6 Private Equity: The Emperor Has No Clothes By Nicolas Rabener: https://blogs.cfainstitute.org/investor/2018/12/03/private-equity-the-emperor-has-no-clothes/ Patrick's Books: Statistics For The Trading Floor: https://amzn.to/3eerLA0 Derivatives For The Trading Floor: https://amzn.to/3cjsyPF Corporate Finance: https://amzn.to/3fn3rvC Patreon Page: https://www.patreon.com/PatrickBoyleOnFinance Visit our website: www.onfinance.org Follow Patrick on Twitter Here: https://twitter.com/PatrickEBoyle Patrick Boyle On Finance Podcast: Spotify: https://open.spotify.com/show/7uhrWlDvxzy9hLoW0EYf0b Apple: https://podcasts.apple.com/us/podcast/patrick-boyle-on-finance/id1547740313 Google Podcasts: https://tinyurl.com/62862nve Join this channel to support making this content: https://www.youtube.com/channel/UCASM0cgfkJxQ1ICmRilfHLw/join Learn more about your ad choices. Visit megaphone.fm/adchoices

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The Private Capital Industry Soars Beyond $7 Trillion
Over the past twenty years, the number of companies listed on the US stock market has almost halved. The world’s largest, most liquid public equity market would appear to have lost its shine.

Institutional investors have been piling into private markets instead, in particular venture capital, private equity and private debt. The Financial Times reported last week that the size of the private capital industry has now reached $7.4tn, fifteen times the size it was in 2000. The industry is expected to reach $13tn in the next four years.

On top of this, a boom in share buybacks, where companies purchase their own stock as an alternative to paying dividends, has further reduced the number of shares outstanding from the remaining public companies. Historically low interest rates have compounded the trend, tempting companies to raise cheap debt rather than to sell equity.

So what has happened to all of the stocks and what should investors do?

Steven Davidoff Solomon Paper https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2400488&rec=1&srcabs=2310441&alg=1&pos=6

Private Equity: The Emperor Has No Clothes By Nicolas Rabener: https://blogs.cfainstitute.org/investor/2018/12/03/private-equity-the-emperor-has-no-clothes/

Patrick's Books:
Statistics For The Trading Floor: https://amzn.to/3eerLA0
Derivatives For The Trading Floor: https://amzn.to/3cjsyPF
Corporate Finance: https://amzn.to/3fn3rvC

Patreon Page: https://www.patreon.com/PatrickBoyleOnFinance

Visit our website: www.onfinance.org
Follow Patrick on Twitter Here: https://twitter.com/PatrickEBoyle

Patrick Boyle On Finance Podcast:
Spotify: https://open.spotify.com/show/7uhrWlDvxzy9hLoW0EYf0b
Apple: https://podcasts.apple.com/us/podcast/patrick-boyle-on-finance/id1547740313
Google Podcasts: https://tinyurl.com/62862nve

Join this channel to support making this content:
https://www.youtube.com/channel/UCASM0cgfkJxQ1ICmRilfHLw/join

Learn more about your ad choices. Visit megaphone.fm/adchoices

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