September 8, 2017

What the huge, fundamental changes in the stock market’s structure mean for investors, with seasoned market observers, Jason Trennert and Jason Zweig.

WEALTHTRACK Episode #1412; Originally Broadcast on September 08, 2017

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Consuelo Mack

This is not your grandmother’s or mother’s market, and if you are a baby boomer, as I am, it’s not even the market of your youth. The very structure of the stock market has changed in some fundamental ways.

The number of publicly traded stocks available to buy has shrunk dramatically. Twenty years ago there were nearly 9,000 publicly traded companies on U.S. stock exchanges. That number has declined more than 40% to just over 5,000 today.

Also, where those stocks are trading has changed.  A decade ago the New York Stock Exchange , with its specialists overseeing orders for each stock,  accounted for 80% of the trading of New York Stock Exchange listed stocks, transactions for all to see. Now only 20% of the trades occur on the big board. The vast majority are disbursed electronically among multiple trading platforms, out of direct human control and the public eye.

Where are new companies getting the financing to develop and grow? Largely from private investors through private equity firms. There are now more than 4,000 private equity firms globally, up from a mere 100 a couple of decades ago.  95% of them are in the U.S., and  they are overseeing an estimated $2.5 trillion worth of assets.

The supply of stocks is shrinking, but the number of indexes is exploding.
There are now more benchmark indexes than there are stocks, over 5,000 of them. Many of them are being created to meet the swelling demand for passive index investments, especially exchange-traded funds, or ETFs. The number of ETFs has also soared in recent years to almost 2,000 in the U.S., with about $3 trillion in assets.  Four of the five most actively traded securities last year were ETFs. The one exception?  Bank of America stock.

What do all of these changes mean for investors? Joining us on WEALTHTRACK this week are two financial thought leaders, one from Wall Street, and one covering it.  We’ll hear from Jason Trennert, Co-Founder, Managing Partner and Chief Investment Strategist at Strategas Research Partners, an independent investment strategy and macroeconomic  research firm followed by institutional investors because of its original and proprietary analysis of the markets, economy and fiscal and monetary policies.  We’ll also hear from Jason Zweig, a highly respected financial journalist, who writes “The Intelligent Investor” column for The Wall Street Journal, named after Benjamin Graham’s classic, The Intelligent Investor.  Zweig is the editor of the latest revised edition.  He is also the author of several books including Your Money & Your Brain, and the satirical, funny and oh so sobering look at Wall Street, The Devil’s Financial Dictionary. Our discussion began with why so few companies are going public.

If you’d like to watch the show before it airs, it is available to our PREMIUM viewers on our websiteright now.  Also, exclusively online, we’ll share additional EXTRA interviews with both Trennert and Zweig.

Plus, a reminder that if you would like to take WEALTHTRACK with you on your commute or travels, you can now find the WEALTHTRACKpodcast on TuneInStitcher, and SoundCloud, as well as iTunes. Find out more on the WEALTHTRACK Podcast page.

As always, thank you so much for watching.  Have a great weekend and make the week ahead a profitable and productive one.

Best Regards,

Mathews Asia


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The Devil’s Financial Dictionary

Your Money and Your Brain: How the New Science of Neuroeconomics Can Help Make You Rich


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There are two business areas where power is being increasingly concentrated in the hands of a few. They have escaped regulatory scrutiny so far but two seasoned market observers believe that is going to change.
Jason Trennert is watching the companies dominating the flow of information. Jason Zweig is focusing on the index fund behemoths.

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