The Stupidity of the Big Company/Small Company Argument

Lately, there’s been a torrent of popular press refuting the notion that small business “drives” the US economy. This is sheer nonsense.

The only way to get a big company is for a small one to get big. Huge companies don’t just materialize out of thin air. (Occasionally there are spin-offs, but these are comparatively rare.) Of course big companies have more profits and do more hiring—they’re, well, a lot bigger. But no company starts out huge; they start small. You have to have lots and lots and lots of small companies come and go, with access to capital, hiring and firing, to get just one Facebook or Microsoft or FedEx, or Caterpillar, and so on.

The reason this is so important is because we need constant renewal of our big companies, they aren’t at all static in place or size—take a look at what was in the Fortune 500 just 20 years ago versus today…vastly different! Small companies become big companies and big companies falter or shrink (hello, Kodak?), and those are the things that drive growth, innovation, productivity, and jobs. Not a stagnant pool of big companies that expand and contract like an accordion with growth/recession.

Nurturing the real job creators – John Bunzel

Get your Fisher Investments Election Fix

Fisher Investments (the firm I work for), along with MarketMinder, has posted several good resources on the upcoming US elections and the stock market:

·        An Election Year Lexicon

·        Fisher Investments Global Elections Update

·        Fisher Investments View of the US Presidential Election

·        What Effect Can the Election Year Have on Your Portfolio