The shrinking stock market

[LC]

https://www.cnn.com/2019/11/29/investing/nyse-direct-listings-spotify-slack/index.html

 

Perhaps another factor influencing high equity prices: less publicly traded companies

 

New York (CNN Business)America's stock market is shrinking. The number of public companies has been cut roughly in half over the past two decades, mostly by choice.

 

Some don't want to deal with the pressure and reporting requirements. Others are avoiding the hassle and expense of an IPO. And a lucky few just don't need the money.

[Gregmal]

Aint that something, huh?

 

A simple explanation to a situation that has long confounded many intelligent investors....supply and demand. Unlike tulips or Pokemon cards, you cant just manufacture additional supply of great businesses. Welcome to the modern world.

[RuleNumberOne]

This explanation of fewer public companies is several years old, keeps appearing in different media outlets from time to time. We need to look at the market cap of the entire stock market.

 

We have $4.9 trillion in market cap in the big five tech companies. In 1996 you didn't have that concentration.

 

I think the reason stock prices keep going up without increased sales is the percentage of investors who have never experienced a bear market keeps going up everyday. I was just reading Howard Marks writing about the 1990s - the players "moving the market felt no fear."

 

@LC The same CNN article says this:

 

"Also, there is so much money sloshing around Silicon Valley that some unicorns have achieved jaw-dropping valuations that would be hard to replicate on Wall Street. Just recently, investors balked at WeWork's lofty price tag and questionable practices, forcing the company to abandon its IPO and eventually seek a bailout from SoftBank.

"Capital is locked up in the private market at inflated prices. It can't get out at reasonable prices," said Kathleen Smith, principal at Renaissance Capital, which runs the Renaissance IPO ETF (IPO). "They are trapped. They want another way to get out."

[Spekulatius]

"Capital is locked up in the private market at inflated prices. It can't get out at reasonable prices," said Kathleen Smith, principal at Renaissance Capital, which runs the Renaissance IPO ETF (IPO). "They are trapped. They want another way to get out."

 

I a guess it’s trapped because they can’t get out at unreasonable prices. I am certain they could get out at reasonable prices with the last rounds going into a loss.

[RuleNumberOne]

Yeah, you are right. This Renaissance IPO ETF was a real IPO pumper, they make their money from IPOs. Their idea of "reasonable" is different. At the start of 2019, Renaissance IPO ETF was talking completely different stuff.

 

 

"Capital is locked up in the private market at inflated prices. It can't get out at reasonable prices," said Kathleen Smith, principal at Renaissance Capital, which runs the Renaissance IPO ETF (IPO). "They are trapped. They want another way to get out."

 

I a guess it’s trapped because they can’t get out at unreasonable prices. I am certain they could get out at reasonable prices with the last rounds going into a loss.

[Gregmal]

I think the reason stock prices keep going up without increased sales is the percentage of investors who have never experienced a bear market keeps going up everyday. I was just reading Howard Marks writing about the 1990s - the players "moving the market felt no fear."

 

And just the same, you have an entire generation of investors who are still scarred by 2008 an just spent a decade plus sitting on piles of cash and whining about how valuations were out of line or using any excuse they could think of to write off making investments.

 

With regard to your perspective or mine, one involves things remaining the same, and another involves things changing.... I'd just point out that last November and December's market crash certainly brought about fear to many. Just go read the threads about how many even here and on other platforms for investors where losing their minds. How many were clamoring about Fed policies and rate hikes and all this other excuse laden jargon from the past decade as "reasons" the market was going down. As if, for the first time in history, investors collectively just woke up and decided the sky was falling.... turned out to be more of the same from those folks. False cries of fire in a crowded room.

 

So I also think the claim about investors not having seen a bear market or whatever is again somewhat misleading. Or at the least, symptomatic of the same fear thats held plenty back over the past decade. H2 of 2011 was certainly no cakewalk. We've had multi year periods of stagnancy, we've had oil market taking historic plunges, Q1 2016, multiple flash crashes, and December 2018 which was historically one of the most violent drops ever.

 

So I dont really know what many of you are waiting for? You guys missed the boat and continue to do so and what? Claim to be waiting for once in a generation type crashes, which history has shown, even if you invested the day prior, you'd wait MAYBE a few years to get back to even with, even assuming you didn't average down ONCE along the way? And using outliers like WeWork as the basis to kick the can down the road on PLENTY of otherwise wonderful and healthy businesses...does what exactly?

 

Then again, if it wasn't for this behavior maybe we would be in a bubble...

[RuleNumberOne]

@Gregmal,

 

You flew off the handle with a lot of incorrect assumptions.

- The combined IRAs of myself and my wife have been multiplied by 10x during this bull market.

 

- I am fully invested right now but might get out anytime. In the last year alone, I have made somewhere between 40-45%.

 

- But all of this has happened with long durations of sitting out of the stock market and timing the market.

 

- I am referring to the amount of insanity in the financial market. When it gets too much I get out.

I have already made my money in an IPO and I need to make sure I don't lose it speculating in an insane stock market full of newbies.

 

- The December 2018 correction was a mild, minor correction. It is like a 5-minute wash cycle. A bear market is like a 1-hour wash cycle. If somebody hasn't gone through a bear market, December 2018 may have been a traumatic experience. But it was quite mild if you were mentally prepared for it.

 

- I am not waiting for once-in-a-generation crash. But neither do I agree with investing in a stock market that goes up every week despite zero sales growth.

 

- I was using margin during 2007-2009 just like you do right now. But I would have made more money if I hadn't used margin. Things like margin work during a 5-minute light wash cycle, not a 1-hour heavy wash cycle.

 

 

 

I think the reason stock prices keep going up without increased sales is the percentage of investors who have never experienced a bear market keeps going up everyday. I was just reading Howard Marks writing about the 1990s - the players "moving the market felt no fear."

 

And just the same, you have an entire generation of investors who are still scarred by 2008 an just spent a decade plus sitting on piles of cash and whining about how valuations were out of line or using any excuse they could think of to write off making investments.

 

With regard to your perspective or mine, one involves things remaining the same, and another involves things changing.... I'd just point out that last November and December's market crash certainly brought about fear to many. Just go read the threads about how many even here and on other platforms for investors where losing their minds. How many were clamoring about Fed policies and rate hikes and all this other excuse laden jargon from the past decade as "reasons" the market was going down. As if, for the first time in history, investors collectively just woke up and decided the sky was falling.... turned out to be more of the same from those folks. False cries of fire in a crowded room.

 

So I also think the claim about investors not having seen a bear market or whatever is again somewhat misleading. Or at the least, symptomatic of the same fear thats held plenty back over the past decade. H2 of 2011 was certainly no cakewalk. We've had multi year periods of stagnancy, we've had oil market taking historic plunges, Q1 2016, multiple flash crashes, and December 2018 which was historically one of the most violent drops ever.

 

So I dont really know what many of you are waiting for? You guys missed the boat and continue to do so and what? Claim to be waiting for once in a generation type crashes, which history has shown, even if you invested the day prior, you'd wait MAYBE a few years to get back to even with, even assuming you didn't average down ONCE along the way? And using outliers like WeWork as the basis to kick the can down the road on PLENTY of otherwise wonderful and healthy businesses...does what exactly?

 

Then again, if it wasn't for this behavior maybe we would be in a bubble...

[DTEJD1997]

This explanation of fewer public companies is several years old, keeps appearing in different media outlets from time to time. We need to look at the market cap of the entire stock market.

 

We have $4.9 trillion in market cap in the big five tech companies. In 1996 you didn't have that concentration.

 

I think the reason stock prices keep going up without increased sales is the percentage of investors who have never experienced a bear market keeps going up everyday. I was just reading Howard Marks writing about the 1990s - the players "moving the market felt no fear."

 

@LC The same CNN article says this:

 

"Also, there is so much money sloshing around Silicon Valley that some unicorns have achieved jaw-dropping valuations that would be hard to replicate on Wall Street. Just recently, investors balked at WeWork's lofty price tag and questionable practices, forcing the company to abandon its IPO and eventually seek a bailout from SoftBank.

"Capital is locked up in the private market at inflated prices. It can't get out at reasonable prices," said Kathleen Smith, principal at Renaissance Capital, which runs the Renaissance IPO ETF (IPO). "They are trapped. They want another way to get out."

 

I know there are MONEY MANAGERS who have never experienced a true bear market!

 

It is one thing to read about bear markets and collapsing sectors...it is another thing altogether to actually go through it.  To lose money, to lose your job maybe, to lose properties or businesses.  I knew people who went through the Great Depression and it changed them forever. 

 

There are also a TON of real estate people starting to pop up today who weren't active in 08/09/10 when prices cratered.

 

The government has intervened WAY TOO MUCH with interest rates and the markets.  Every so often, you need a recession to clear out stupid/weak companies, businesses, projects, investors.  Since it has been so long since we've had a recession, there are lots of overvalued/stupid/weak investments/projects/businesses going on.

[Gregmal]

@Gregmal,

 

You flew off the handle with a lot of incorrect assumptions.

- The combined IRAs of myself and my wife have been multiplied by 10x during this bull market.

 

- I am fully invested right now but might get out anytime. In the last year alone, I have made somewhere between 40-45%.

 

- But all of this has happened with long durations of sitting out of the stock market and timing the market.

 

- I am referring to the amount of insanity in the financial market. When it gets too much I get out.

I have already made my money in an IPO and I need to make sure I don't lose it speculating in an insane stock market full of newbies.

 

- The December 2018 correction was a mild, minor correction. It is like a 5-minute wash cycle. A bear market is like a 1-hour wash cycle. If somebody hasn't gone through a bear market, December 2018 may have been a traumatic experience. But it was quite mild if you were mentally prepared for it.

 

- I am not waiting for once-in-a-generation crash. But neither do I agree with investing in a stock market that goes up every week despite zero sales growth.

 

- I was using margin during 2007-2009 just like you do right now. But I would have made more money if I hadn't used margin. Things like margin work during a 5-minute light wash cycle, not a 1-hour heavy wash cycle.

 

 

 

I think the reason stock prices keep going up without increased sales is the percentage of investors who have never experienced a bear market keeps going up everyday. I was just reading Howard Marks writing about the 1990s - the players "moving the market felt no fear."

 

And just the same, you have an entire generation of investors who are still scarred by 2008 an just spent a decade plus sitting on piles of cash and whining about how valuations were out of line or using any excuse they could think of to write off making investments.

 

With regard to your perspective or mine, one involves things remaining the same, and another involves things changing.... I'd just point out that last November and December's market crash certainly brought about fear to many. Just go read the threads about how many even here and on other platforms for investors where losing their minds. How many were clamoring about Fed policies and rate hikes and all this other excuse laden jargon from the past decade as "reasons" the market was going down. As if, for the first time in history, investors collectively just woke up and decided the sky was falling.... turned out to be more of the same from those folks. False cries of fire in a crowded room.

 

So I also think the claim about investors not having seen a bear market or whatever is again somewhat misleading. Or at the least, symptomatic of the same fear thats held plenty back over the past decade. H2 of 2011 was certainly no cakewalk. We've had multi year periods of stagnancy, we've had oil market taking historic plunges, Q1 2016, multiple flash crashes, and December 2018 which was historically one of the most violent drops ever.

 

So I dont really know what many of you are waiting for? You guys missed the boat and continue to do so and what? Claim to be waiting for once in a generation type crashes, which history has shown, even if you invested the day prior, you'd wait MAYBE a few years to get back to even with, even assuming you didn't average down ONCE along the way? And using outliers like WeWork as the basis to kick the can down the road on PLENTY of otherwise wonderful and healthy businesses...does what exactly?

 

Then again, if it wasn't for this behavior maybe we would be in a bubble...

 

Which it seems you did as well with respect to the assumptions.

 

I would agree with you regarding the timing of market moves, I've stated plenty of times Im winding down exposure quite a bit as well.

 

But when you talk about the insanity of the markets, you're grossly misrepresenting things. Painting the entire market as if it's a sushi roll consisting of Wework wrapped in Beyond Meat with some Theranos sprinkled on top. Maybe some Peloton too. This is hardly the case.

 

If you want to talk about the unicorns and Saas stuff, sure. But stuff like this has always existed. This time is nothing different.

 

You dont need to tell me about handling November/December of 2018, I was 150% right playing that as many here can attest to. But to talk about what was easily one of the worst stretches in the history of the stock market, not to mention the reactions to it of many, many "pros".... its laughable hindsite/armchair confidence. Or at least, an arrogant oversimplification. Just as it is to say the market "goes up every week despite zero sales growth"....

 

Plenty of things can grow or gain value despite growth in sales. This is where supply and demand is important to understand.

 

Margin does not always mean balls to the wall long. Its also a way to hedge or eliminate risks. Its also a way to take more shots that dont necessarily have to correlate and if you're a good shooter, you will do fine.

 

People can do what they are comfortable with. And sitting on cash for a little while is fine if you arent able to find anything better to do with it. But after a while, call it a year, 3 years, 5 years, whatever, your opportunity cost significantly outweighs whatever you think and hope to be able to do when "the big one happens". Its the price to pay for being wrong. There were people who were still calling for downside with S&P below 700 in 2009.

 

In regards to the topic of the thread though, it makes perfect sense. Basic supply and demand. Much of tech is winner take all, or most of. You have dominant high quality stuff there commanding tons of capital and premiums, for many of the reason you describe. They have all the resources and almost all of the talent, or at least access to it. You were complaining about MasterCard in another thread, but outside of Visa and MA, maybe you've got a tiny few "others" on the periphery...what do you think thats worth? Now incorporate low rates. Decline of cash use. You're looking for what? Multiple contraction? MA ended 2013 at a mid $80's print. Its spent several years consolidating and doing little by the way of appreciating in share price to any wild degree despite continuing to exhibit dominance and hold a death grip on commerce along with Visa. So yea its gone on a bit of a run, and it might be a bit extended, but thats how the stock market works sometimes. Its hardly emblematic of a chicken little scenario. As I said before, you could have bought MA right into the GFC, at the highs, and been whole, plus some, within TWO YEARS! after not having added a share! And thats with a once in a generation type event. If that doesnt occur, then what? You're worried about MA in a regular old run of the mill bear market? LOL Come on.

 

Recessions and collapses just clear out the weak. So owning the best of breed, high quality and dominant players...you could make the case that the less skilled investor or one not interested in timing the market should just buy it at any price and put it away. At any point in the cycle.

 

And there's plenty of companies similar to MA that the above apply to. And as they continue to consume any worthwhile competition, not to mention make so much money that they can afford to piss money away buying out the bad ones too, that dominance will just get greater, and when the supply of competitors for them dwindles and the investment alternatives for investors does as well... its kind of obvious what the result will be, until the government decides to intervene.

 

 

 

 

 

[RuleNumberOne]

In hindsight all of us should have done many things at the height of the GFC. In hindsight there are many stocks we could have bought at different times.

 

I am not a fan of MA because their ROC is not attained by any science/engineering prowess. They pay their engineers half of what other tech companies pay.

 

Their moat can be removed at any time by an anti-monopoly regulator.

 

I personally thought Q4 2018 was a mild one because the duration was small. A long bear market would have you go over the waterfall many times.

 

@Gregmal,

 

You flew off the handle with a lot of incorrect assumptions.

- The combined IRAs of myself and my wife have been multiplied by 10x during this bull market.

 

- I am fully invested right now but might get out anytime. In the last year alone, I have made somewhere between 40-45%.

 

- But all of this has happened with long durations of sitting out of the stock market and timing the market.

 

- I am referring to the amount of insanity in the financial market. When it gets too much I get out.

I have already made my money in an IPO and I need to make sure I don't lose it speculating in an insane stock market full of newbies.

 

- The December 2018 correction was a mild, minor correction. It is like a 5-minute wash cycle. A bear market is like a 1-hour wash cycle. If somebody hasn't gone through a bear market, December 2018 may have been a traumatic experience. But it was quite mild if you were mentally prepared for it.

 

- I am not waiting for once-in-a-generation crash. But neither do I agree with investing in a stock market that goes up every week despite zero sales growth.

 

- I was using margin during 2007-2009 just like you do right now. But I would have made more money if I hadn't used margin. Things like margin work during a 5-minute light wash cycle, not a 1-hour heavy wash cycle.

 

 

 

I think the reason stock prices keep going up without increased sales is the percentage of investors who have never experienced a bear market keeps going up everyday. I was just reading Howard Marks writing about the 1990s - the players "moving the market felt no fear."

 

And just the same, you have an entire generation of investors who are still scarred by 2008 an just spent a decade plus sitting on piles of cash and whining about how valuations were out of line or using any excuse they could think of to write off making investments.

 

With regard to your perspective or mine, one involves things remaining the same, and another involves things changing.... I'd just point out that last November and December's market crash certainly brought about fear to many. Just go read the threads about how many even here and on other platforms for investors where losing their minds. How many were clamoring about Fed policies and rate hikes and all this other excuse laden jargon from the past decade as "reasons" the market was going down. As if, for the first time in history, investors collectively just woke up and decided the sky was falling.... turned out to be more of the same from those folks. False cries of fire in a crowded room.

 

So I also think the claim about investors not having seen a bear market or whatever is again somewhat misleading. Or at the least, symptomatic of the same fear thats held plenty back over the past decade. H2 of 2011 was certainly no cakewalk. We've had multi year periods of stagnancy, we've had oil market taking historic plunges, Q1 2016, multiple flash crashes, and December 2018 which was historically one of the most violent drops ever.

 

So I dont really know what many of you are waiting for? You guys missed the boat and continue to do so and what? Claim to be waiting for once in a generation type crashes, which history has shown, even if you invested the day prior, you'd wait MAYBE a few years to get back to even with, even assuming you didn't average down ONCE along the way? And using outliers like WeWork as the basis to kick the can down the road on PLENTY of otherwise wonderful and healthy businesses...does what exactly?

 

Then again, if it wasn't for this behavior maybe we would be in a bubble...

 

Which it seems you did as well with respect to the assumptions.

 

I would agree with you regarding the timing of market moves, I've stated plenty of times Im winding down exposure quite a bit as well.

 

But when you talk about the insanity of the markets, you're grossly misrepresenting things. Painting the entire market as if it's a sushi roll consisting of Wework wrapped in Beyond Meat with some Theranos sprinkled on top. Maybe some Peloton too. This is hardly the case.

 

If you want to talk about the unicorns and Saas stuff, sure. But stuff like this has always existed. This time is nothing different.

 

You dont need to tell me about handling November/December of 2018, I was 150% right playing that as many here can attest to. But to talk about what was easily one of the worst stretches in the history of the stock market, not to mention the reactions to it of many, many "pros".... its laughable hindsite/armchair confidence. Or at least, an arrogant oversimplification. Just as it is to say the market "goes up every week despite zero sales growth"....

 

Plenty of things can grow or gain value despite growth in sales. This is where supply and demand is important to understand.

 

Margin does not always mean balls to the wall long. Its also a way to hedge or eliminate risks. Its also a way to take more shots that dont necessarily have to correlate and if you're a good shooter, you will do fine.

 

People can do what they are comfortable with. And sitting on cash for a little while is fine if you arent able to find anything better to do with it. But after a while, call it a year, 3 years, 5 years, whatever, your opportunity cost significantly outweighs whatever you think and hope to be able to do when "the big one happens". Its the price to pay for being wrong. There were people who were still calling for downside with S&P below 700 in 2009.

 

In regards to the topic of the thread though, it makes perfect sense. Basic supply and demand. Much of tech is winner take all, or most of. You have dominant high quality stuff there commanding tons of capital and premiums, for many of the reason you describe. They have all the resources and almost all of the talent, or at least access to it. You were complaining about MasterCard in another thread, but outside of Visa and MA, maybe you've got a tiny few "others" on the periphery...what do you think thats worth? Now incorporate low rates. Decline of cash use. You're looking for what? Multiple contraction? MA ended 2013 at a mid $80's print. Its spent several years consolidating and doing little by the way of appreciating in share price to any wild degree despite continuing to exhibit dominance and hold a death grip on commerce along with Visa. So yea its gone on a bit of a run, and it might be a bit extended, but thats how the stock market works sometimes. Its hardly emblematic of a chicken little scenario. As I said before, you could have bought MA right into the GFC, at the highs, and been whole, plus some, within TWO YEARS! after not having added a share! And thats with a once in a generation type event. If that doesnt occur, then what? You're worried about MA in a regular old run of the mill bear market? LOL Come on.

 

Recessions and collapses just clear out the weak. So owning the best of breed, high quality and dominant players...you could make the case that the less skilled investor or one not interested in timing the market should just buy it at any price and put it away. At any point in the cycle.

 

And there's plenty of companies similar to MA that the above apply to. And as they continue to consume any worthwhile competition, not to mention make so much money that they can afford to piss money away buying out the bad ones too, that dominance will just get greater, and when the supply of competitors for them dwindles and the investment alternatives for investors does as well... its kind of obvious what the result will be, until the government decides to intervene.

[RuleNumberOne]

Couldn't agree more.

 

I think what is different this cycle is the Euro. When the cycle ends, the Euro would collapse because nothing has been fixed there since the crisis erupted in 2010. Postponing the end of the cycle doesn't change that, but the IMF and ECB (along with Trump) put a lot of pressure on the Fed to not raise rates.

 

Even with money managers who have experienced a bear market, they are investing other people's fickle money. They need to get their 2-and-20 as fast as they can before the OPM gets taken away. The only logical thing for them is to buy momentum stocks with the temporary OPM.

 

This explanation of fewer public companies is several years old, keeps appearing in different media outlets from time to time. We need to look at the market cap of the entire stock market.

 

We have $4.9 trillion in market cap in the big five tech companies. In 1996 you didn't have that concentration.

 

I think the reason stock prices keep going up without increased sales is the percentage of investors who have never experienced a bear market keeps going up everyday. I was just reading Howard Marks writing about the 1990s - the players "moving the market felt no fear."

 

@LC The same CNN article says this:

 

"Also, there is so much money sloshing around Silicon Valley that some unicorns have achieved jaw-dropping valuations that would be hard to replicate on Wall Street. Just recently, investors balked at WeWork's lofty price tag and questionable practices, forcing the company to abandon its IPO and eventually seek a bailout from SoftBank.

"Capital is locked up in the private market at inflated prices. It can't get out at reasonable prices," said Kathleen Smith, principal at Renaissance Capital, which runs the Renaissance IPO ETF (IPO). "They are trapped. They want another way to get out."

 

I know there are MONEY MANAGERS who have never experienced a true bear market!

 

It is one thing to read about bear markets and collapsing sectors...it is another thing altogether to actually go through it.  To lose money, to lose your job maybe, to lose properties or businesses.  I knew people who went through the Great Depression and it changed them forever. 

 

There are also a TON of real estate people starting to pop up today who weren't active in 08/09/10 when prices cratered.

 

The government has intervened WAY TOO MUCH with interest rates and the markets.  Every so often, you need a recession to clear out stupid/weak companies, businesses, projects, investors.  Since it has been so long since we've had a recession, there are lots of overvalued/stupid/weak investments/projects/businesses going on.

[Spekulatius]

It’s not just companies disappearing, it’s public companies slowly eating themselves via share buybacks. The latter is a larger factor than companies disappearing. Also accompany disappearing doesn’t mean that the capital has left the market, if it happens via a stock merger for example.

 

As for the stock market, while it may not be a general bubble, the valuations overall is certainly stretched. There seems to be a particular with a narrow set of “quality” stock going on, while the tiers below in quality aren’t really that expensive. While the downturn in late 2018 was certainly considerable, it wasn’t really a severe bear market. It felt more like a correction, similar to 2011 ( European crisis), late 2015 (energy bear) or 1998 (Asian crisis) a short term correction of 29% or so that quickly reverses. Nothing like 1990/91 or 2001/2002 or even 2008/2009. The latter were certainly severe events, but there is certainly a garden variety of scenarios that can play out between the former and the latter event, especially one, where we take a decline and then an extended market where the market sort of just bounced around, instead of climbing right back up.

 

As for what could cause this, I see multiple things they could cause a decline like, negative interest rates blowing up banks, political changes (election), recession, trade war and most likely a combination of these factors.

 

Of course there are always reasons why the market may go down, or why the market may go up. Staying flexible and have a bit of cash in hand, should bargains represent themselves , is how I intend to play this.

[John Hjorth]

... Couldn't agree more ...

 

Ohh, please give me a break. You can talk macro walls-up, and walls-down. It dosen't matter. Where are your long money?

[Cigarbutt]

It’s not just companies disappearing, it’s public companies slowly eating themselves via share buybacks. The latter is a larger factor than companies disappearing. Also accompany disappearing doesn’t mean that the capital has left the market, if it happens via a stock merger for example.

...

Yes, most M&A happens in the public market but the other assumption mentioned (which I thought was correct until I looked at the facts, national accounts and all) needs to factor in that higher buyback activity has been associated with higher issuance of stocks through options and other equity grants. For example, in the last 10 years, on a net basis, net share count reduction occurred only at about 1% per year. Even if absolute amount of dollars were allocated to buybacks, the fact that shares were bought at relatively high levels (opinion) helped to mitigate the share reduction.(!)

If you look at what happened since the mid 90s (by choosing that initial reference point, there is an embedded starting point bias to some degree because this happened to be a high water mark of sorts), the defining features include declining "death" (all causes included) and "birth" rates but the birth rate has declined more, especially during the decade preceding the GFC. Since then, we've pretty much flat-lined, whatever that means.

https://fred.stlouisfed.org/series/DDOM01USA644NWDB

Capital does not die and the stock market has not shrunk ($ value) and it seems like the optimal scenario would involve recycling the enormous amount of capital returned to shareholders into new and more numerous ventures that would (eventually) displace incumbents. Isn't that the secret sauce?