Sunday, March 22, 2009

Future of Wall Street and public companies

With so many rules and regulations and with many more coming, one has to wonder about the future of public companies, the stock market, and Wall Street. Besides, with the advent of the Internet and direct access to consumers and businesses and financial institutions, what benefit does Wall Street really provide? I do not have any immediate answers, but this is something to think about.

One possibility is that a much smaller collection of companies will remain public while smaller companies and some larger companies seek shelter in status of non-public ownership or consolidation with other firms.

It is quite possible that Google (GOOG) was the last major tech IPO of our lifetimes, or at least until Wall Street morphs into a far more rational structure.

It would not surprise me if some of the big banks decided to go private, especially with their puny stock prices.

I remain comfortable with my modest stake in Microsoft (MSFT). It is certainly not be as glamorous as it once was, but it is relatively rock solid (despite what Apple fans and the anti-Microsoft crowd will tell you) and one of the very, very few companies with an AAA credit rating. And it pays a nice dividend which appears to be relatively safe and secure. I am not buying any more outright, but I am reinvesting dividends, at least for now.

I am wondering whether Verizon (VZ) might be a good investment, but I have not done any deep research yet. Landlines may be fading, but the phone companies are stealing cable customers as well. I am contemplating Qwest (Q) as well. One big question is what the new broadband infrastructure stimulus spending will mean for these companies.

-- Jack Krupansky

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