Author Topic: Investing in IPO/new companies  (Read 8447 times)

medinaj2160

  • Stubble
  • **
  • Posts: 158
Investing in IPO/new companies
« on: February 27, 2014, 04:53:35 PM »
I was just looking at the Tesla investment calculator and the Solar City investment calculators and I got depressed. If I had invested $10,000 in Tesla and $10,000 today a year ago I would have right now $120,941.

I understand that no one really beats the market but to me it seems that the odds are better than playing the lottery. I am considering spending $50,000 and splitting it between 5 companies and let it ride for 10 years (my planed retirement age 39) and see what happens.

Any thoughts? Any one investing on IPO's or new companies right now? Any one investing on Tesla and Solar City right now?

The Square and Dropbox are supposed to go public soon. Companies like 3D System, Tesla and Solar City may have a bright future, as well with any other future companies that Elan Musk touches haha.

http://ir.teslamotors.com/calculator.cfm?PostBack=1&initialAmnt=10000&calc_method=amnt&historic_Month=2&historic_Day=27&historic_Year=2013&Submit=Calculate+%C2%A0%C2%A0%3E
http://investors.solarcity.com/calculator.cfm?PostBack=1&initialAmnt=578&calc_method=shrs&historic_Month=2&historic_Day=27&historic_Year=2013&Submit=Calculate

matchewed

  • Magnum Stache
  • ******
  • Posts: 4384
  • Location: CT
Re: Investing in IPO/new companies
« Reply #1 on: February 27, 2014, 04:58:09 PM »

medinaj2160

  • Stubble
  • **
  • Posts: 158
Re: Investing in IPO/new companies
« Reply #2 on: February 27, 2014, 05:03:09 PM »
http://boards.fool.com/ipo-success-rate-26617618.aspx?sort=whole

I think this has a good write up.

Quote
...the average annual return over the five-year period following the offering was 5.1% for the new issues and 11.8% for the comparable firms

Is that supposed to be bad????  with index funds we are shooting for 5-7%....

« Last Edit: February 27, 2014, 05:07:03 PM by medinaj2160 »

KingCoin

  • Pencil Stache
  • ****
  • Posts: 783
  • Location: Manhattan
  • Achieved FI @ 30
Re: Investing in IPO/new companies
« Reply #3 on: February 27, 2014, 05:06:27 PM »
http://boards.fool.com/ipo-success-rate-26617618.aspx?sort=whole

I think this has a good write up.

Quote
...the average annual return over the five-year period following the offering was 5.1% for the new issues and 11.8% for the comparable firms

Is that supposed to be bad????

Underperforming by 6.7%? Yes. That's bad.

matchewed

  • Magnum Stache
  • ******
  • Posts: 4384
  • Location: CT
Re: Investing in IPO/new companies
« Reply #4 on: February 27, 2014, 05:10:15 PM »
http://boards.fool.com/ipo-success-rate-26617618.aspx?sort=whole

I think this has a good write up.

Quote
...the average annual return over the five-year period following the offering was 5.1% for the new issues and 11.8% for the comparable firms

Is that supposed to be bad????  with index funds we are shooting for 5-7%....

We're shooting for after inflation to hit 5-7%, I doubt the quote adjusted for inflation so knock 2-3% off of that 5.1% and tell me if you like those returns.

medinaj2160

  • Stubble
  • **
  • Posts: 158
Re: Investing in IPO/new companies
« Reply #5 on: February 27, 2014, 05:18:09 PM »
http://boards.fool.com/ipo-success-rate-26617618.aspx?sort=whole

I think this has a good write up.

Quote
...the average annual return over the five-year period following the offering was 5.1% for the new issues and 11.8% for the comparable firms

Is that supposed to be bad????  with index funds we are shooting for 5-7%....

We're shooting for after inflation to hit 5-7%, I doubt the quote adjusted for inflation so knock 2-3% off of that 5.1% and tell me if you like those returns.

2-3% is about with what you get from a CD.... at least there is chance of not losing the money.

Also which companies were included in the study? I wonder if there has been a study done on companies whose IPOs were highly anticipated in the press?

KingCoin

  • Pencil Stache
  • ****
  • Posts: 783
  • Location: Manhattan
  • Achieved FI @ 30
Re: Investing in IPO/new companies
« Reply #6 on: February 27, 2014, 06:04:42 PM »
Also which companies were included in the study? I wonder if there has been a study done on companies whose IPOs were highly anticipated in the press?

I doubt that such a study has been done. I also doubt that buying assets that have been hyped by the press is a good idea.

Nords

  • Magnum Stache
  • ******
  • Posts: 3298
  • Age: 60
  • Location: Oahu
    • Military Retirement & Financial Independence blog
Re: Investing in IPO/new companies
« Reply #7 on: February 27, 2014, 07:04:37 PM »
Also which companies were included in the study? I wonder if there has been a study done on companies whose IPOs were highly anticipated in the press?
See if your brokerage (or IPO website) has a list of IPO issues/prices that you would have been able to buy on the market.  Maybe you'd get approved for a portion of the IPO, or maybe you'd have to buy it at the next open.  Crunch the numbers to decide whether the performance makes any sense.

Fidelity used to have an IPO database like this (maybe they still do) and they used to give their hyperactive valued traders a slice of their IPO shares.  This allowed me to compare IPO investments to the share price I actually would have paid, not just what you see on CNBC.

In 2004, investing in all 20 the Fidelity IPOs and holding for six months (the lockup required to participate) would have yielded a total return (not annualized) of 25%.  Taking Google's IPO out of the database would have paid -6%.  (That's a negative return.)  Sure, maybe that's a temporary price drop due to the lockup expiration and ideally your companies would fare better after a few years.  You should run the spreadsheet over the last 15-20 years of data, with holding periods of six months to a decade, to see how your annualized returns compare to the S&P500 or small-cap indexes over the same period.

Humans suck at estimating probabilities.  You claim that your five (undiversified, highly volatile) investments would outperform the lottery.  That's probably true, in the sense that nearly all lottery tickets are worthless on the morning after the lottery.  Your five companies (purchased for $50K) would probably leave you with something like $20K-$75K a year later... and maybe the year after that... and maybe the year after that... and a decade later you might still have something close to just $50K.  You'll probably be richer, but on a risk-adjusted basis you'll still lag the performance of a broad diversified passive index of funds.  Large-cap companies (and established small-cap companies) will do a better job (in aggregate) than your five IPO picks.

Why is the IPO company being so nice to you?  You get to invest in IPOs because the company owners feel that their shares are not undervalued.  They're also selling shares because it's a cheaper way to raise cash (greater fools) than dealing with VCs.  Hedge funds have access to IPOs too, and yet Buffett is winning his decade-long bet with a hedge-fund owner that the index will beat their performance.

If you want to engage in this testosterone-poisoned stock-picking investment strategy, I'd suggest limiting it to 5%-10% of your total investment portfolio.

Undecided

  • Handlebar Stache
  • *****
  • Posts: 1089
Re: Investing in IPO/new companies
« Reply #8 on: February 27, 2014, 07:07:31 PM »
Also which companies were included in the study? I wonder if there has been a study done on companies whose IPOs were highly anticipated in the press?

I doubt that such a study has been done. I also doubt that buying assets that have been hyped by the press is a good idea.

I vaguely recall living in such a study in 1998-2001. Didn't write down the findings, though, sorry.

KingCoin

  • Pencil Stache
  • ****
  • Posts: 783
  • Location: Manhattan
  • Achieved FI @ 30
Re: Investing in IPO/new companies
« Reply #9 on: February 27, 2014, 07:22:15 PM »
As usual, the market is going to be reasonably efficient about this kind of thing. If IPO's were significant and consistent outperformers, people would bid up IPOs to the point where this was no longer true. Outperforming the market is never that easy.

matchewed

  • Magnum Stache
  • ******
  • Posts: 4384
  • Location: CT
Re: Investing in IPO/new companies
« Reply #10 on: February 27, 2014, 07:29:08 PM »
http://bear.warrington.ufl.edu/ritter/rittipo1.pdf

A study which does a section on long-term performance of IPO's.

foobar

  • Pencil Stache
  • ****
  • Posts: 731
Re: Investing in IPO/new companies
« Reply #11 on: February 27, 2014, 07:44:16 PM »
And if you bought groupon or  Zygna you could have turned that 10 into 3k.  Your odds might be better than winning the lottery but they are still poor. Picking one of the dozen stocks that goes up 10x out of the 5k out there is pretty hard.

I was just looking at the Tesla investment calculator and the Solar City investment calculators and I got depressed. If I had invested $10,000 in Tesla and $10,000 today a year ago I would have right now $120,941.

I understand that no one really beats the market but to me it seems that the odds are better than playing the lottery. I am considering spending $50,000 and splitting it between 5 companies and let it ride for 10 years (my planed retirement age 39) and see what happens.

Any thoughts? Any one investing on IPO's or new companies right now? Any one investing on Tesla and Solar City right now?

The Square and Dropbox are supposed to go public soon. Companies like 3D System, Tesla and Solar City may have a bright future, as well with any other future companies that Elan Musk touches haha.

http://ir.teslamotors.com/calculator.cfm?PostBack=1&initialAmnt=10000&calc_method=amnt&historic_Month=2&historic_Day=27&historic_Year=2013&Submit=Calculate+%C2%A0%C2%A0%3E
http://investors.solarcity.com/calculator.cfm?PostBack=1&initialAmnt=578&calc_method=shrs&historic_Month=2&historic_Day=27&historic_Year=2013&Submit=Calculate

medinaj2160

  • Stubble
  • **
  • Posts: 158
Re: Investing in IPO/new companies
« Reply #12 on: February 27, 2014, 08:13:51 PM »
And if you bought groupon or  Zygna you could have turned that 10 into 3k.  Your odds might be better than winning the lottery but they are still poor. Picking one of the dozen stocks that goes up 10x out of the 5k out there is pretty hard.

I was just looking at the Tesla investment calculator and the Solar City investment calculators and I got depressed. If I had invested $10,000 in Tesla and $10,000 today a year ago I would have right now $120,941.

I understand that no one really beats the market but to me it seems that the odds are better than playing the lottery. I am considering spending $50,000 and splitting it between 5 companies and let it ride for 10 years (my planed retirement age 39) and see what happens.

Any thoughts? Any one investing on IPO's or new companies right now? Any one investing on Tesla and Solar City right now?

The Square and Dropbox are supposed to go public soon. Companies like 3D System, Tesla and Solar City may have a bright future, as well with any other future companies that Elan Musk touches haha.

http://ir.teslamotors.com/calculator.cfm?PostBack=1&initialAmnt=10000&calc_method=amnt&historic_Month=2&historic_Day=27&historic_Year=2013&Submit=Calculate+%C2%A0%C2%A0%3E
http://investors.solarcity.com/calculator.cfm?PostBack=1&initialAmnt=578&calc_method=shrs&historic_Month=2&historic_Day=27&historic_Year=2013&Submit=Calculate

There lies the problem, finding a good company.

The company that I work for will go public in one or two years; the company produces fuel cell and all electric vehicles will see what happens.

I like investing in technology...


foobar

  • Pencil Stache
  • ****
  • Posts: 731
Re: Investing in IPO/new companies
« Reply #13 on: February 28, 2014, 06:38:20 AM »
IPOs are great for the people who have .01 shares. Now paying 20 dollars to buy one of those .01 shares is a lot more of a crap shoot:)


And if you bought groupon or  Zygna you could have turned that 10 into 3k.  Your odds might be better than winning the lottery but they are still poor. Picking one of the dozen stocks that goes up 10x out of the 5k out there is pretty hard.

I was just looking at the Tesla investment calculator and the Solar City investment calculators and I got depressed. If I had invested $10,000 in Tesla and $10,000 today a year ago I would have right now $120,941.

I understand that no one really beats the market but to me it seems that the odds are better than playing the lottery. I am considering spending $50,000 and splitting it between 5 companies and let it ride for 10 years (my planed retirement age 39) and see what happens.

Any thoughts? Any one investing on IPO's or new companies right now? Any one investing on Tesla and Solar City right now?

The Square and Dropbox are supposed to go public soon. Companies like 3D System, Tesla and Solar City may have a bright future, as well with any other future companies that Elan Musk touches haha.

http://ir.teslamotors.com/calculator.cfm?PostBack=1&initialAmnt=10000&calc_method=amnt&historic_Month=2&historic_Day=27&historic_Year=2013&Submit=Calculate+%C2%A0%C2%A0%3E
http://investors.solarcity.com/calculator.cfm?PostBack=1&initialAmnt=578&calc_method=shrs&historic_Month=2&historic_Day=27&historic_Year=2013&Submit=Calculate

There lies the problem, finding a good company.

The company that I work for will go public in one or two years; the company produces fuel cell and all electric vehicles will see what happens.

I like investing in technology...

kyleaaa

  • Bristles
  • ***
  • Posts: 327
    • Kyle Bumpus
Re: Investing in IPO/new companies
« Reply #14 on: February 28, 2014, 07:09:19 AM »
http://boards.fool.com/ipo-success-rate-26617618.aspx?sort=whole

I think this has a good write up.

Quote
...the average annual return over the five-year period following the offering was 5.1% for the new issues and 11.8% for the comparable firms

Is that supposed to be bad????  with index funds we are shooting for 5-7%....

We're shooting for after inflation to hit 5-7%, I doubt the quote adjusted for inflation so knock 2-3% off of that 5.1% and tell me if you like those returns.

2-3% is about with what you get from a CD.... at least there is chance of not losing the money.

Also which companies were included in the study? I wonder if there has been a study done on companies whose IPOs were highly anticipated in the press?

IPO performance has been studied to death. It's perhaps one of the most-studied subjects in all of finance going back decades. The results are pretty conclusive: it's a bad idea for the little guy. Sure, IF you can get in at the IPO price you MIGHT make decent money, but you won't be able to get in at the IPO price. The underwriters only give that price to their hedge fund billionaire friends. The little guy will probably end up paying twice the IPO price if they're lucky. It's a rigged game. A little Googling will yield dozens of studies for you to read if you're so inclined. Unless you can get in on the actual IPO price, it's a losers game. And even then, the odds aren't great.
« Last Edit: February 28, 2014, 07:11:58 AM by kyleaaa »

matchewed

  • Magnum Stache
  • ******
  • Posts: 4384
  • Location: CT
Re: Investing in IPO/new companies
« Reply #15 on: February 28, 2014, 07:11:22 AM »
And if you bought groupon or  Zygna you could have turned that 10 into 3k.  Your odds might be better than winning the lottery but they are still poor. Picking one of the dozen stocks that goes up 10x out of the 5k out there is pretty hard.

I was just looking at the Tesla investment calculator and the Solar City investment calculators and I got depressed. If I had invested $10,000 in Tesla and $10,000 today a year ago I would have right now $120,941.

I understand that no one really beats the market but to me it seems that the odds are better than playing the lottery. I am considering spending $50,000 and splitting it between 5 companies and let it ride for 10 years (my planed retirement age 39) and see what happens.

Any thoughts? Any one investing on IPO's or new companies right now? Any one investing on Tesla and Solar City right now?

The Square and Dropbox are supposed to go public soon. Companies like 3D System, Tesla and Solar City may have a bright future, as well with any other future companies that Elan Musk touches haha.

http://ir.teslamotors.com/calculator.cfm?PostBack=1&initialAmnt=10000&calc_method=amnt&historic_Month=2&historic_Day=27&historic_Year=2013&Submit=Calculate+%C2%A0%C2%A0%3E
http://investors.solarcity.com/calculator.cfm?PostBack=1&initialAmnt=578&calc_method=shrs&historic_Month=2&historic_Day=27&historic_Year=2013&Submit=Calculate

There lies the problem, finding a good company.

The company that I work for will go public in one or two years; the company produces fuel cell and all electric vehicles will see what happens.

I like investing in technology...

If you like investing in technology how about a proven tech company? Why does it have to be an IPO given the poor track record.

arebelspy

  • Administrator
  • Senior Mustachian
  • *****
  • Posts: 28254
  • Age: -999
  • Location: Seattle, WA
Re: Investing in IPO/new companies
« Reply #16 on: February 28, 2014, 07:33:47 AM »
If you like investing in technology how about a proven tech company? Why does it have to be an IPO given the poor track record.

(S)he also likes gambling.

;)
We are two former teachers who accumulated a bunch of real estate, retired at 29, spent some time traveling the world full time and are now settled with three kids.
If you want to know more about us, or how we did that, or see lots of pictures, this Business Insider profile tells our story pretty well.
We (rarely) blog at AdventuringAlong.com. Check out our Now page to see what we're up to currently.

medinaj2160

  • Stubble
  • **
  • Posts: 158
Re: Investing in IPO/new companies
« Reply #17 on: February 28, 2014, 02:53:44 PM »
If you like investing in technology how about a proven tech company? Why does it have to be an IPO given the poor track record.

(S)he also likes gambling.

;)

Any one can go to work, save money, buy index funds and retire.

I am doing what most people on here are doing, saving around 70% of my income and possibly retire around 38-39 according to early retirement calculators with a 5% annual return.

Is not like I am going to put all my money on new companies. I just want to put some of my money on possibly high return investments to shorten my time to early retirement. Again I am just willing to bet a small percentage of my money.

Plug Power, Hydrogenics, UQM, 3D systmes, Tesla, Solar City and similar companies.




Spork

  • Walrus Stache
  • *******
  • Posts: 5748
    • Spork In The Eye
Re: Investing in IPO/new companies
« Reply #18 on: February 28, 2014, 03:02:28 PM »
IPO performance has been studied to death. It's perhaps one of the most-studied subjects in all of finance going back decades. The results are pretty conclusive: it's a bad idea for the little guy. Sure, IF you can get in at the IPO price you MIGHT make decent money, but you won't be able to get in at the IPO price. The underwriters only give that price to their hedge fund billionaire friends. The little guy will probably end up paying twice the IPO price if they're lucky. It's a rigged game. A little Googling will yield dozens of studies for you to read if you're so inclined. Unless you can get in on the actual IPO price, it's a losers game. And even then, the odds aren't great.

Came to say the same thing.  There have been a handful of IPOs I was interested in.  (Usually, it was an emotional interest and I didn't make a valid business case).  There was always big interest and ... the price shot up the minute it hit the market.  So I suspect the whole idea of "If I had bought X when it IPO'ed" ... isn't exactly what you'd think it is.

But: that said.  I did have a (private) credit union offer all of it's members a $5000 stake in their IPO at the IPO price.  I didn't quite make the 120x return that is suggested of Tesla...  But we did double our money very quickly.   We held onto the stock for several years and it never really went significantly up or down.  But it was a nice 100% ROI.

wtjbatman

  • Handlebar Stache
  • *****
  • Posts: 1310
  • Age: 37
  • Location: Missouri
Re: Investing in IPO/new companies
« Reply #19 on: February 28, 2014, 07:33:51 PM »
It's your money, go for it. Keep us updated.

hodedofome

  • Handlebar Stache
  • *****
  • Posts: 1397
  • Age: 40
  • Location: Texas
Re: Investing in IPO/new companies
« Reply #20 on: March 03, 2014, 04:20:22 PM »
You must have a complete methodology for investing in IPOs. And, you must do it in a way that puts the odds in your favor.

Just deciding on 5 random IPOs that you 'believe' will be good, isn't good enough IMO. A good company or good technology does not make a good stock. Do you realize that most of the big-name IPOs these days are the inside investors cashing in? They are not raising money so that they can invest in the business. They are paying off all the seed investors, founders and private equity guys. And the public gets stuck with the bill. With things like SecondMarket, the shares could have changed hands several times before they get to you. Very easily you could be the greatest fool buying on IPO day.

You will have to view each IPO you buy as completely random. It could go up or down, or sideways, and you really have no idea which one it's going to be. Just buying 5 companies is not enough diversification. They could all go to zero. Professional traders and gamblers will hardly ever risk more than 1-2 percent of their account on any one stock/trade/poker hand etc. This is because risking any more than that could easily blow up their account. Suppose you are right on 50% of the IPOs that you buy. Even though in the end you are right half the time, you still may have a string of 10 or 20 losers in a row. What if you risked 10% on each stock and lost 10 times in a row? You'd be broke.

A complete trading system that buys IPOs would go something like this:

1) Use the high of the IPO day as the trigger
2) Buy the stock when it closes above the high of the IPO day
3) Subtract 10% from the high of the IPO day price as the 'stoploss'
4) The distance between the entry point (IPO day high) and the stop loss is the risk
5) Risk no more than 1% of account equity on any 1 IPO
6) If not stopped out, sell IPO when it closes below the 200 day moving average

So, if the high of the IPO day is $10, then your initial stop loss would be $9. With a $50,000 account, you would risk $500 on each trade. The distance between $10 and $9 is $1. $500 divided by $1 is 500. You would buy 500 shares of the IPO at $10. This means you're actually buying $5000 worth of stock, but your RISK is $500 because you are gonna sell if it drops more than $1 a share. If the IPO goes up to $50, congrats you just made $20k. That just paid for 40 losing trades. You could also have quite a few losing trades in a row. Most likely you would give up after about 5 losing trades in a row. This is not for the faint of heart. Don't ever risk more than 10% of your savings on speculative stuff like this. Unless you are a professional trader, you'll probably lose money. If you end up making any money, it's probably because you got lucky. Professional traders work very hard at this kind of stuff. Don't expect that you'll make anything from 'playing around,' but good luck anyways.


yahui168

  • 5 O'Clock Shadow
  • *
  • Posts: 92
  • Age: 44
  • Location: CA
Re: Investing in IPO/new companies
« Reply #21 on: March 03, 2014, 06:01:52 PM »
medinaj2160,

Everyone is talking you off the ledge because it sounds like  you're new to investing in general. How many years of investing experience do you have? How well do you understand the mechanics of investments? stocks, mutual funds, bonds, options, etfs, ipos, etc. Rising tide lift all boats so picking a winner seems easy. According to the efficient frontier, the overall return needs to beat the market index significantly to be worth the risk of the investments. The volatility makes timing a significant factor. Facebook dropped below 20 before breaching the open market IPO price.

RaveOregon

  • 5 O'Clock Shadow
  • *
  • Posts: 40
  • Age: 32
  • Location: NY
Re: Investing in IPO/new companies
« Reply #22 on: March 04, 2014, 06:15:22 AM »
I believe Loyal3 lets you buy into IPOs at the issue price. That would be the best place to go for this type of strategy I would think

KingCoin

  • Pencil Stache
  • ****
  • Posts: 783
  • Location: Manhattan
  • Achieved FI @ 30
Re: Investing in IPO/new companies
« Reply #23 on: March 04, 2014, 08:48:01 AM »
I believe Loyal3 lets you buy into IPOs at the issue price. That would be the best place to go for this type of strategy I would think

If you were IPOing your company, would you use Loyal3 or Goldman Sachs? Loyal3 has no track record or reputation and I'd be very weary of negative selection bias for the companies that choose them to handle their financial matter.

If you want to gamble, you might look for stocks with ~$50mm market cap and an intriguing growth story. If the company is eventually worth $10bn, you've made a nice 200x your money. Many IPO's come when the market cap is already quite high. A $20bn company simply has less room for growth. Even if becomes the largest companies in the world, you've you've "only" made about 20x.

RaveOregon

  • 5 O'Clock Shadow
  • *
  • Posts: 40
  • Age: 32
  • Location: NY
Re: Investing in IPO/new companies
« Reply #24 on: March 04, 2014, 09:07:18 AM »
They don't actually issue it, they just let you buy in at the price a place like Goldman Sachs gets. I have never done it so I do not know much more than that.

Undecided

  • Handlebar Stache
  • *****
  • Posts: 1089
Re: Investing in IPO/new companies
« Reply #25 on: March 04, 2014, 09:27:21 AM »
They don't actually issue it, they just let you buy in at the price a place like Goldman Sachs gets. I have never done it so I do not know much more than that.

You should at least try to understand the firm-commitment underwriting process if you're entertaining g thoughts about this as an investment strategy.

RaveOregon

  • 5 O'Clock Shadow
  • *
  • Posts: 40
  • Age: 32
  • Location: NY
Re: Investing in IPO/new companies
« Reply #26 on: March 04, 2014, 09:34:06 AM »
I have 0 desire to invest in IPO's, so I don't exactly know a ton about them.

soccerluvof4

  • Walrus Stache
  • *******
  • Posts: 6178
  • Location: Artic Midwest
  • Retired at 50
    • My Journal
Re: Investing in IPO/new companies
« Reply #27 on: March 04, 2014, 09:37:29 AM »
There is alot to investing into IPO's as everyone has indicated. Its your money do as you wish. Personally, if your looking at doing anything right now Uncertainty and unpredictability are potentially destabilizing influences.

The important message to me, however, is that the investment mosaic is increasingly complicated and subject to more shocks than ever before. The vulnerability to stock prices is further threatened by global monetary policy that prevents, at times, the natural discovery of prices.

You can call it black swans or just reality, but economic, policy, profit and geopolitical risks have increased geometrically in an aging bull market and with global economic expansion.

That is, in part, why I have been cautious on the 25% revaluation upward in 2013 P/E ratios.

It's unlikely that 2014 will be straight up, as has been the case of the past few years -- rather it will be volatile, as uncertainty and unpredictability are potentially destabilizing influences.

It will also probably be a fractal-busting year for the U.S. stock market during which special sauce believers are confounded and discovered to be swimming naked when the tide goes out.

In a volatile and more random (and trendless) market backdrop, charts will likely lose their predictive effectiveness, telling us less about the future of prices, though documenting from whence stock prices have come.

Nows a time to trade opportunistically IMHO that is all.

Spork

  • Walrus Stache
  • *******
  • Posts: 5748
    • Spork In The Eye
Re: Investing in IPO/new companies
« Reply #28 on: March 04, 2014, 09:39:37 AM »
It will also probably be a fractal-busting year for the U.S. stock market during which special sauce believers are confounded and discovered to be swimming naked when the tide goes out.

I don't really want to say anything here except: Awesome wordsmithing there!  You made a mental image and made me smile.

DrTesla

  • 5 O'Clock Shadow
  • *
  • Posts: 19
Re: Investing in IPO/new companies
« Reply #29 on: March 04, 2014, 10:44:01 AM »
Don't forget about SpaceX. It is private for now but we will soon have an IPO from Elon Musk for that company.

I foresee him pulling all three of his companies into one huge Umbrella Company to complete his Vision, since the technology of all three can unify together.