Fewer, but bigger.
This describes the transformation that the U.S. stock market has undergone over the last few decades.
There are fewer publicly listed companies today than there were in 1976. However, the average market cap for a publicly listed company today is over $10 billion, up from less than $700 million in 1976, adjusted for inflation.
The enormous increase of the average U.S. company is driven by changes at opposite ends of the spectrum; The big are getting bigger, and the tiny ones are disappearing, mostly as a result of M&A.
“More than 90 percent of the stocks that have disappeared since 1996 were those of small- and micro-capitalization companies”
This has big implications for the investing landscape, which Mauboussin and Callahan go deep on. The whole thing is worth checking out. Hit the link below.