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Companies Grow Bigger as Field Grows Smaller Featured

Jason Zweig had an article in the Wall Street Journal over the weekend discussing consolidation. He offers up some interesting facts, such as the top four real estate services now “command 78% of the groups combined revenue” and the number of publicly traded grocers declined to 11 from 36.
Zweig lists a couple of reasons for this decline: a reduction of antitrust enforcement and the need to spend on technology. But that really means capital and that gets to what I see as the main culprits: an unwillingness to invest in most companies and increased regulation.
The decline in public companies goes hand-in-hand with the rise of mutual and index funds, as well as the regulation boom that started in the late ‘60s.
As I’ve said before, big likes big. So Big Banks, Big Government and Big Inventors prefer Big Companies. 

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Ted Craig

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