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by moorhosj
2806 days ago
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==Then rational investors will avoid risker share investments in new companies it will reinforce the position of incumbents who will be forced to pay out more in dividends and become bond proxies.== Investors will seek alpha wherever they can get it. If there is a flight into "safer" investments, the market would adjust and the returns of those "safer" investments would fall. If investors want alpha returns, they will take risks. This is a fundamental truth of investing. Are the incumbent's positions not reinforced in today's environment? There are 3,618 publicly traded companies today compared to 6,407 in 1987 [1]. Is that a sign of positive competition? Today's capital gains rate is the lowest since the Depression [2]. Yet, entrepreneurial activity is at generational lows [3]. [1] https://www.bloomberg.com/view/articles/2018-04-09/where-hav... [2] https://www.cbpp.org/sites/default/files/thumbnails/image/ca... [3] https://money.cnn.com/2016/09/08/news/economy/us-startups-ne... |
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