Thursday, March 24, 2005

Institutional Investor--MORE BROKERS?

Institutional Investor

has plans to recruit more brokers. The firm plans to try to hire brokers away from other firms. Is this not an interesting situation?

The discount brokers are in a price war and the "big boys" are hiring! The indication is that the big firms are gearing up for IPO's and then distribution of institutional holdings. It will take two or three years to beef up the "force" and to be ready. The IPO market may heat up fairly soon. Vonage is the next big IPO. VOIP has been growing but perhaps a little slower than expected. AT&T Call Advantage only added 54,000 subscribers in 2004. Vonage is making steady gains but the free service offered by Skype has picked up 29 million users! Skype is adding paid features.

Sometimes individuals forget that the big brokerage firms act as distribution arms for big institutional investors. My forecast is for a strong market run over the next 3 or 4 years but the retirement of the baby boomers should bring about a slower growth economy.