Felix Salmon

Charts of the day, US listings edition

By Felix Salmon
January 25, 2011

My cunning plan to get my readers to do all the work for me in terms of finding graphs of the number of stocks listed on the NYSE and Nasdaq worked like magic! Here, from Second Market, is the chart for the NYSE:


And here’s the Nasdaq:


The big picture here is that both exchanges are declining in terms of number of listings, neither show any signs of recovering any time soon, and in both cases the decline in listings started before the dot-com bubble burst.

Inevitably there’s a bare minimum of listings which the US stock market will asymptotically approach. But this isn’t cyclical, it’s secular. We had our big equities boom from 1950 to 2000, and now it’s over. Even if valuations go back up, the cult of the US stock market as the best and obvious place to invest your money has gone forever, in a world where it’s easier, more lucrative, and less risky to buy bonds or foreign stocks or even commodities than it is to buy General Electric or eBay or Enron.

Update: As Traders Narrative notes, the charts come from a Grant Thornton report. Which was sent to me by Second Market.

6 comments so far | RSS Comments RSS

But don’t forget that consolidation of maturing industries, lack of new groundbreaking industries, and the evaporation of the antitrust laws all have played a role in this decline. It isn’t just going private transactions that remove a listing.

(speaking as someone who’s managed a delisting or two…..)

Posted by Dollared | Report as abusive

“…in a world where it’s easier, more lucrative, and less risky to buy bonds or foreign stocks or even commodities than it is to buy General Electric… ”

Felix I’ll bet you dollars to donuts that GE shares outperform GE bonds over the next 10 years or that the S&P 500 bought tomorrow will trounce the next 10 year treasury bond sold at auction and held to maturity.

With interest rates held at an artificially low level bonds are no longer “safer” than a diversified basket of stocks for those saving for a retirement a decade or more in the future. In the last 20 years rates fell 1000 basis points. In that world if you buy a 7 year bond at issue hold it for 5 years collecting the coupon and sell it at a huge premium and repeat the process… you just got coupon+.

In the next 10 years rates will rise… maybe not by 1000 basis points but still you’re going to get coupon – and that’s a night and day difference. Anyone who thinks bonds are still the place to be should note that the worlds largest bond manager is rushing to set up it’s equity business.

Posted by y2kurtus | Report as abusive

y2kurtus: Really? I wish I was so sanguine regarding the preformance of equities over the next 10 years. I’m not sure you understand what people mean by “safer”. Stocks will probably outperform equities over the next 10 years, but they are still less safe.

A treasury bond held to maturity will pay exactly what it says it will pay (or the world is so screwed up your equities will be a disaster anyways). Stocks will most likely do better, but they may not, and if you need them for retirement income you may be forced to sell at the equivalent of January 2009. This is called risk.

Basically, it seems insane to guarantee a 10-year equity performance at a date when equities have provided a zero return for 12 years.

Posted by Dan_K | Report as abusive

it’s interesting to note that the majority of de-listings came before SarbOx.

I would also like someone to make an educated guess as to how “online brokerage” can be blamed for delisting.

Posted by johnhhaskell | Report as abusive

One of the great casualties of the 1970′s inflation is the phrase “dollars to donuts”; at this point, it’s about an even bet. Perhaps 30 years from now it will be understood as it was originally meant, but the other way around.

Posted by dWj | Report as abusive


Probably not discussed at Davos, but lots of really neat charts:

http://www.gmo.com/websitecontent/JGLett er_PavlovsBulls_4Q10.pdf

The second half on Graham – Dodds is where the good charts are.

Posted by ARJTurgot2 | Report as abusive

Post Your Comment

We welcome comments that advance the story through relevant opinion, anecdotes, links and data. If you see a comment that you believe is irrelevant or inappropriate, you can flag it to our editors by using the report abuse links. Views expressed in the comments do not represent those of Reuters. For more information on our comment policy, see http://blogs.reuters.com/fulldisclosure/2010/09/27/toward-a-more-thoughtful-conversation-on-stories/