Paul Mampilly Predicts the End of Wall Street.

February 14th, 2018 by admin

Paul Mampilly is a former Wall Street insider. He spent two decades as a stock analyst and fund manager helping to make wealthy people even wealthier. He has worked for such institutions as Bankers Trust, the Royal Bank of Scotland, ING, private Swiss banks, Sears and Deutsche Bank. The hedge fund he managed for Kinetics Asset Management was named as one of the world’s best by BARRON’S. It’s important to understand Paul Mampilly is not an outsider criticizing Wall Street. He knows how it works.

Therefore, investors should pay close attention to a recent blog article he wrote predicting an end to the glory days of Wall Street, especially the investment banking function. The purpose for having a stock market is not to give investors a chance to get rich by buying and selling shares of stocks. That happens, but that’s not why the stock exchanges exist. The whole purpose is to raise money for companies to get listed on the stock exchanges. It’s a big deal for the companies, but they basically need the money that comes from selling their shares of stock to investors to expand and improve their businesses.

And that’s how, historically, the major Wall Street institutions have made the big money. They charge corporations 5% to 7% to help them go public. According to one study of documents at the Securities and Exchange Commission, companies paid on average $3.5 million. But Paul Mampilly says that sounds too low. The process does require a lot of knowledge and experience to avoid breaking a government securities law or regulation. But it takes a big bite out of what the companies wind up receiving. Wall Street investment bankers have been so greedy, they’ve practically killed off the goose that lays the golden egg. In 1999, Wall Street held 486 Initial Public Offerings. That has declined to just 105 in 2016.

Now, because of the blockchain technology introduced by Bitcoin, new companies that need to raise more capital are using Initial Coin Offerings (ICO) or Initial Token Offerings (ITO). It costs only $100 to $300,000, a lot less than a Wall Street investment bank would charge. So far, nobody has yet used this method to raise money in place of an initial offering of stock. However, once somebody figures it out and successfully accomplished it, the middlemen of Wall Street are doomed, disrupted by technology. Paul Mampilly writes an investment newsletter called Profits Unlimited where he advises readers how to profit from such opportunities.

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Posted in Businessman, Investor

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