Is it Time for Capital Markets to Evolve?

Oct 27, 2022 | Finconomics 101, No Bull Economics


There are a lot of brilliant minds working hard on Wall Street to help investors pick winning investments, thus directing capital into opportunities offering the best returns. In turn, funding for the best business models provide the most utility for the economy and the best jobs for society. Further, Wall Street guides help shepherd healthy business cycles which act to cull weak companies to make room for new, better-positioned entrants (a process referred to as creative destruction). These are all good things, vital things.

Where this virtuous cycle may become bogged-down is after a company goes public and starts trading on the exchanges. At this point, Wall Street’s focus on buying/selling winners/losers detracts from its ability to support and fund business innovation and profit growth. Of course, it is a good thing to generate profits for both individuals as well as institutions like pension funds. Also, it is great that higher stock prices benefit well-run public companies that eventually intend to raise additional funds by issuing more equity for sale. However, we suggest that it is perhaps not the best use of all the Wall Street brilliance to focus on developing the highest-yielding trading strategies.

Rather, what if all this brilliant research and analysis was directed at helping companies to implement more profitable operating strategies? In other words, what if Wall Street acted like a consultant to public companies rather than as trading consultants to investors? In this case, Wall Street would support long-term investors by helping to build corporate profits (creating value as opposed to facilitating speculation). This simple upgrade could represent a key element in helping the capital markets to evolve into a more refined force for economic good. 

Trading Evolving into Building Image
Trading Evolving Into Building

Follow us on LinkedInTwitterFacebook, and YouTube!

Disclaimer of Liability
No Bull Economics
Restaurant Research

Email Sign-up

Jack in the Box Corporate Insights

Jack in the Box results reflected an improvement in: dining room openings (60% of system); innovation, upsell & add-ons sales; digital progress which is helping frequency; and late-night.

How to Circumvent Food Shortages?

The vulnerabilities of a long-distance supply chain have become very evident over the last couple of years, especially when it comes to farming.

This Week in Summary 11/18/2022

We want to spotlight Target this week which provides valuable insight on consumer spending.

How Would You Value the Federal Reserve?

Here is an idea: let’s take the Federal Reserve public in the world’s largest IPO.

How to Pass Along Inflationary Costs Without Losing Traffic?

Wendy’s is avoiding standardized menu price increases and turning to strategic increases designed not to price out lower income consumers.

Investors in Retail Stocks Think Consumers are Back

Recent retail stock gains would suggest that investors are confident in consumer strength, despite continuing inflationary issues.

Papa John’s & Chili’s Reveal the Plight of Cash Strapped Consumers

The relevant question remains whether consumers who are increasingly cash-strapped can be convinced to pay more for higher quality levels?

This Week in Summary 11/11/2022

Market melt up & the midterm elections

DoorDash’s Grip on Labor Costs is Funding New Investments

Doordash’s platform generated +10% of all restaurant industry sales.

3Q Results for Bloomin’, Texas Roadhouse & Cheesecake

Full serve restaurant sales performance is currently a function of customer demographics.

Digital Marketing Opportunities
Restaurant Research

A Restaurant Research LLC Company