Revolution

In years past most companies sold stock to get money for growth but in recent years companies have turned to private equity firms like Blackstone and Carlyle. The advantage is that private equity firms are not subject to government oversight. Thus, they can offer a higher return with lower risk and that in itself should be a warning. A public company can be quickly evaluated by its stock price but with private equity the public must rely on managements value. As the number of private equity firms end up in bankruptcy the public trust is waning and the growth in this area is declining. This decline is part of the Trump revolution. The economy is moving away from the trend toward finance back to the old ways of manufacturing. The influence of the big banks will also lessen as smaller banks begin to make business loans. Big corporations will rely less on mergers and start to build new facilities which means more emphasis on manufacturing. For people who were adults in the 50’s and 60’s this will be a return to the old days but for most people this will be a new experience.