The Real Reason Half of U.S. Companies Have Disappeared

By Grant Wasylik, analyst, Palm Beach Daily

This may be the most shocking chart you’ll see this year.

Over the past two decades, nearly half of the publicly traded companies in the U.S. have vanished…

According to the World Bank, the number of U.S. listed companies dropped from a high of 8,090 in 1996 to 4,744 at the end of 2019.

But it’s not just the World Bank seeing this…

The Wilshire 5000 Total Market Index is the oldest measure of the entire U.S. stock market.

When the index launched in 1974, it had 5,000 stocks. It grew as high as 7,562 in 1998. But by the end of 2019, the index had been cut by more than half – to 3,473.

This trend isn’t set to reverse, either. Global consulting firm McKinsey & Company projects 75% of S&P 500 companies will disappear over the next decade.

So what’s causing so many U.S. companies to disappear?

The answer isn’t China… technology… or changing demographics.

Today, I’ll tell you what’s behind the demise of the publicly listed company – and more importantly, how you can profit from it.


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The Incredible Shrinking Stock Market

The main reason we’re seeing fewer publicly listed companies is because they’re staying private much longer.

As you can see in the chart below, in 2018, the average company stayed private for 13 years – over three times longer than in 1999.

The main reason companies are staying private longer is because it’s more profitable for them. And when they eventually go public, they’ll do so at much higher valuations.

As you can see in the chart above, from 1999 to 2018, the average market cap of private companies at IPO has jumped 294%.

For mom-and-pop investors, it’s a double whammy. There are fewer public companies to choose from (meaning fewer opportunities to make profits). And buyers pay a lot more for companies when they go public.

Meanwhile, early investors laugh their way to the bank. They’re making big profits by off-loading private companies with massive valuations onto an unsuspecting public.

But at the Daily, we show you how to turn the tables on Wall Street’s elite…

So if you really want to build your wealth, you’ll need to consider investing in private equity. But until recently, the elite walled off this $5 trillion market from ordinary investors.

Today, that’s all changed. And I’ll show you how anyone with $500 – or less in some cases – can get into this growing market…


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Invest in This Growing Market

According to McKinsey & Company, the private market has over $5 trillion in assets under management. So private companies can easily raise capital without going public.

And it’s paid off…

Over the last 20 years, the U.S. Venture Capital – Early Stage Index has returned an average of more than 86% per year. Yet most of the well-known stock indexes – like the S&P 500, Nasdaq, and Russell 2000 – have returned an average of less than 7% per year.

That’s not a typo. Early stage, private companies have returned over 12x what public companies have during the past two decades.

And now, new rules from the Securities and Exchange Commission allow ordinary investors to get in the game and invest in private companies before they go public…

They’re called Regulation CF and Regulation A+ offerings. The main difference is in the amount of money each can raise. Regulation CF offerings can raise up to $1 million from the public. And Regulation A+ offerings can raise up to $50 million.

You can often invest in a Reg CF offering with as little as $100. And minimums for Reg A+ deals generally range from $250–1,000.


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Here’s what Daily editor Teeka Tiwari recently had to say about private deals:

Venture capital firms have used them for years to make 10, 100, and even 1,000 times their money.

Now, you can search for private deals yourself on crowdfunding platforms like SeedInvest and MicroVentures. They list dozens of startup companies raising money from the general public.

For massive gains, it’s essential to have an allocation to the private markets. So consider creating your own portfolio of 10–12 startups. You just need one of them to hit it big to make life-changing gains.

But remember, this asset class comes with risk. So a small grubstake is enough. We recommend a total allocation of up to 5% for private markets.

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Three Steps Could Help Your Portfolio Survive the Next Crash

By Dr. David Eifrig, editor, Retirement Millionaire


When my business partners and I decided to create our Stansberry Portfolio Solutions service a few years back, we had one goal in mind: Give subscribers a one-stop shop where they can find a portfolio built around our best ideas.

So Steve and I got together with our company’s founder Porter Stansberry… And we decided to create three portfolios that covered anything subscribers could possibly need and want, based on what we would want if our roles were reversed.

It was an audacious plan…

We created The Capital Portfolio for folks – likely younger ones – who were looking for capital gains over a longer period of time.

The Income Portfolio was created for people who need to preserve capital and use it to generate high current and future income.

We topped these off with The Total Portfolio, which was designed to look across all of Stansberry Research’s newsletters and trading services… and blend our best ideas into a single portfolio that balances growth, value, and income ideas, along with market hedges that protect your principal during a downturn.

As of last year, we added a fourth portfolio to the mix… The Defensive Portfolio. It’s the “stay wealthy” counterpart to Capital’s “get wealthy” objective.

Stansberry Research had never done something like this before. As a group, we were nervous. As the “guru” of my own investment letter, it’s easy to decide what’s best.

But bringing great minds together to agree and allocate… that was going to be interesting.

What if we couldn’t do it? After all, as I’ll show you today, a portfolio isn’t just a collection of good businesses…


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A good portfolio requires matching your position size with your convictions. It requires deciding on specific goals – so far as risk and return goes – and sorting through thousands of potential investments to reach them.

For us, it was a new set of challenges.

For example, the stock market’s bull run is getting older and older. Many market metrics show valuations that textbooks and Nobel Prize-winning economists would have told you were unattainable.

As a result, Total’s cash position has at times exceeded 20% of the portfolio, and short positions have at times made up to 12%. Even Income has been holding 3%-7% in cash at times, looking for safe opportunities to generate income over the long term.

These decisions have consequences for our results…

Growing your wealth safely requires more layers than just picking different stocks. We had to beef up our firm’s position-tracking and analytics, add staff members to monitor every tick in the markets, and regularly convene our investment committee for long discussions about the allocations of winners and losers. For us, a percentage here and a percentage there makes a difference.

And so far… I think we’ve nailed it.

In 2019, the benchmark S&P 500 Index went up 31% annualized. Meanwhile, our portfolios have delivered annualized returns of 42% (Capital), 32.6% (Total), 27.3% (Income), and 20.3% (Defensive).

In other words, Total and Capital both surpassed the broader market. And Income and Defensive both did exceedingly well, despite holding substantial positions in cash and gold, fixed-income investments (for Income), and safe short-term government bonds (for Defensive).

Our audacious plan has turned out to be a good one. But don’t judge us by these returns alone. The true test will be what comes next… Our best performance is still ahead of us.

Anyone could have earned roughly 30% – or close to it – in an S&P 500 Index fund last year (including dividends). Earn that year after year, and you’re on your way to doubling your money every three years or so.

But to be frank… you won’t earn that most years. Most years won’t be anything like 2019. And most stretches of nearly a decade won’t come close to delivering the returns we’ve enjoyed since the market bottomed in March 2009.


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Those index returns are great when you can get them. But a reckoning is coming. It always does.

We don’t know when… but the stock market has 10%, 20%, and 30% drops in its future. That’s just what markets do.

In my view, you can’t – and shouldn’t try to – trade around reasonable declines. Taxes are the most obvious reason. After you pay capital-gains taxes, you’d have to trade a 20% correction exactly right to come out ahead. And no one gets it exactly right.

Instead, when the market correction does come, it will unveil the true strengths of the portfolios we’ve built.

As I said, The Total Portfolio has beaten the stock market. But it has done so while also holding a large amount of capital in short positions, cash, and even gold stocks. Those hedges will lose when the market keeps hitting new highs, but they’ll keep you safe when it declines.

And while this focus on risk management and capital preservation has sometimes muted our results… it will pay off in the long run.

I hope you’ve been putting this model to work in your own portfolio. Of course, this does mean it’s important to select high-quality businesses that deliver large gains and offset what you’ve set aside in conservative investments.

That’s what we’ve done in our Portfolio Solutions. We’ve been able to beat the market without feeling like we overextended ourselves into the hottest names. Our big gainers allow us to hold the safe positions and still ride the market higher.

But no matter what your personal investing approach is, the important thing is to sleep well at night knowing your portfolio can withstand a surprise drawdown.

So make sure you follow these three steps…

Pay attention to your position sizes and your aversion to risk (think losses and roller-coaster stock prices). Don’t be tempted to try timing the tops and bottoms… It’s statistically impossible.

Be sure you also think about cash, because at least 10% of the time over a three-year period, cash outperforms the other asset classes. Having some capital for bargain hunting when you need it most will also keep you from having to sell assets at precisely the wrong time (when the selling is overdone).

Finally, the old adage about letting profits run and cutting losses short has never been so critical in our investing lifetime.