Won’t you please help?!?
In his blog this past Sunday, Mark Cuban asked “What Business is Wall Street In?” Cuban went on to state this:
The important issue is recognizing that Wall Street is no longer what it was designed to be. Wall Street was designed to be a market to which companies provide securities (stocks/bonds), from which they received capital that would help them start/grow/sell businesses. Investors made their money by recognizing value where others did not, or by simply committing to a company and growing with it as a shareholder, receiving dividends or appreciation in their holdings. What percentage of the market is driven by investors these days?
Cuban is dead right. If you don’t believe that markets are being manipulated, you have to look no further than New York Stock Exchange results last week or this video. Financial companies grew to enormous size by creating impossible to understand “vehicles”, and some firms imploded. That left the survivors to grow impossibly large once again. Today, they are mercenaries, weathering the backlash from the “Great Recession” that they fueled and lobbying like crazy to try to avoid greater oversight.
Somewhere along the way, the idea of building companies organically and allowing investors to participate in that growth got lost. Good, old-fashioned, responsible capitalism is a rare thing these days outside of small companies.
According to the U.S. Department of Commerce, small firms:
• Represent 99.7 percent of all employer firms.
• Employ just over half of all private sector employees.
• Pay 44 percent of total U.S. private payroll.
• Have generated 64 percent of net new jobs over the past 15 years.
• Create more than half of the nonfarm private gross domestic product (GDP).
• Hire 40 percent of high-tech workers (such as scientists, engineers, and computer programmers).
• Made up 97.3 percent of all identified exporters and produced 30.2 percent of the known export value in FY 2007.
• Produce 13 times more patents per employee than large patenting firms; these patents are twice as likely as large firm patents to be among the one percent most cited.
EXAIR is a small company. Like a lot of other small companies out there, our fortunes aren’t tied to the daily market report.
We’re happy to report that we are growing and hiring. We’re creating value, not manipulating the market for quick buck.
If you work for a public company, I don’t envy you. If you work for a subsidiary of a subsidiary of a conglomerate, I pity you.
The game board isn’t tilted in your favor.