Speaking for the 95th Percent

NEW YORK ( TheStreet) -- Almost a year ago The New Yorker ran a clever cover of tuxedoed gentlemen lounging in a lifeboat while the economy, in the form of the "Titanic," sank behind them.

The Occupy movement followed soon after.

Most of the protesters last year were students and ordinary workers, often at the median income or below. (Median family income was $49,445 last September, according to USA Today.)

There were exceptions. There were some wealthy celebrities, even a politician or two. Since then, the "wealth gap" between the rich and the middle class has become a salient issue.

But today I want to talk about the 95th percent. I'm talking here of people who are quite comfortable, with family incomes up to $200,000 per year. People who live in nice houses, who have money to invest, but who don't consider themselves rich. The retail investor.

Retail investors buy stocks, bonds, mutual funds and exchange-traded funds, mostly for retirement accounts. Retail investors often use discount brokerages, investing or trading online. I'm a retail investor. I tell friends I have a bookie named Chuck, also known as Charles Schwab ( SCHW).

But in the last few years the pickings for retail investors have become slimmer and slimmer. The social boom wasn't made available to us until it was ready to bust, as I noted here at TheStreet.com in May.. All the good deals, and all the big gains, are being sucked up by venture capitalists and private equity, by the 1%. More accurately, by 1% of the 1%.

The JOBS Act signed earlier this year will make things worse, not better. You can now have up to 2,000 people investing in your company and not have to report your finances to regulators, as the law firm of Lathrop & Gage explains. The result is a vast new unregulated market, private companies issuing stock to employees and investors that is traded privately.

The CEOs behind these deals love the new game. They don't have to talk to reporters or analysts. They don't have to worry about what retail investors think, or the coming quarter. They no longer go to public markets to get investors. They go to public markets to cash out, to find suckers. Like those who bought Facebook ( FB) at $38 a share.

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