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Pastimes : Home on the range where the buffalo roam -- Ignore unavailable to you. Want to Upgrade?

To: Sig who wrote (10565)	2/21/2001 2:05:59 PM
From: Raymond Duray	Read Replies (1) \| Respond to of 13572

Hi sig, While what you describe in your well considered post is the reality of the IPO market, what I rant for and about is the idealized version of the same. Interestingly, in October of 1998, as I was starting to do DD on the IPO market in general, I ran across a website that categorized performance for all the IPOs of the previous 2 years, i.e. '96-'98. What I found made me drop my chin a bit. Fully 92% of all the new companies were trading at a price below their IPO offer price. Should we do the same examination today of stocks that have been introduce to the sucker, er, excuse me, the investor in the future, in the last 3 years, we would find the statistics to be dramatically monotonous. The same proportion of losers today as there was in the last trough. I find myself in complete agreement with John Bogle, founder of the Vanguard Funds. His contention in "Bogle on Mutual Funds" is that the goal of Wall Street is to fleece Main Street. I've seen no contradictory evidence in the course of my examination of the public markets. So, sure, lots of fools lost money on gold mining stocks in 1851, in canal company stocks in 1810, in radio companies in 1929, I'll grant you that. My point, and I do have one, is that is contingent upon the individual investor to see through the fog of disinformation surrounding the public markets and realize that from a statistical perspective, the smart thing to do is to short the new company market, en masse, as quickly as shares become available. To risk one's capital doing so on a small number of stocks risks catastrophe due to short squeezes and other manipulations, but to do so with a sizable stake spread over at least a dozen companies is a statistically significant no-brainer. Keep in mind, I think there is a lot of money made in the IPO market. It is made by the insiders, vulture capitalists, underwriters and the chosen special people who are given the privelege of participating in the IPO, only to flip the shares to the gullible public at a profit as quickly as possible. Generally, the IPO is a pipe dream sold to an eager public, who never ever seem to get beyond P.T. Barnum's dictum: "There's a sucker born every minute." Updated to today, that would be every couple of seconds. JMVHO, Ray