Everyone knows that CEOs of large Corporations maintain large slush funds. It may be functionally impossible to run a large entity without an open source of available Cash for immediate Capital demands. Everyone also screams every time one of these Cash dispersals are found, at least since the old Watergate Days. The trouble with proper accounting of these funds lay in that the information allows Anyone to track the progress and direction of the Corporation; a factor which incites every CEO to hide the accounting of such funds. It can even be consistently stated that CEOs who do not hide this accounting are acting irresponsibly as chief agent for the Corporations they represent. We still howl for the hides of the chief officers when such funds surface publicly. One has to ask whether this is the most sensible methodology which should be utilized.
There has been a major withdrawal of small investors from Stocks in 2008-09. They exhibit no current attempt to return to the Markets, and the transfers of Capital will not likely come back. Less than competent investment strategy will await successive years of Stocks outperforming Bond yields, while more intelligent planning may await some indication that the actual economy regains capacity to expand. The traders within the Markets have been making a good Return, but it is clear this Profitability is dependent on their knowledge of the activities of their compatriots. There is a subsistence gain which can be derived from the downsizing potentials of the Market elements, but this does not bode well for long-term Profitability. It is this long-term Gain which is necessary to bring the small investors back, and it isn’t coming soon; Government monetary and economic policy showing minor impact.
Bruce Krasting has written a Post which could provide Doubt that the small investors will ever be back. Long-term population trends indicate far less economic expansion, unless Consumers acquire far more funds to consume; nowhere is this apparent where equated to Product pricing. Here We have the problem with minor Wage increases combined with slight reductions in Hours worked; all to cancel projected Wage increases. One of the greatest reasons that all Economists and a fair share of Business leadership concentrates on Trade comes from knowledge that domestic markets are relatively filled, with little chance of meaningful expansion. Curatives for this obvious fact should be advanced, before We begin to resemble the France between the World Wars. India’s population will never buy, as they will be choked by starvation aversion and land impossibilities, which means that viable productive land capacity cannot be found for either Production and Housing, or reliable Mining capacities. It is not going to get better for a long while, and Investors as a class may disappear with the actual Production. lgl