The financial media loves a catch phrase and, with the apparent emotional hook of the ‘fiscal cliff’ diminished, we needed a new one. The current best candidate is the so-called ‘Great Rotation.’ The idea here is that investors, finally and completely fed up with the dismal returns from bonds, are going to move heavily back into equities. This is the ‘Great Rotation.’ When I Google the term, there are 820,000 search results. Not bad for a phrase that was invented in October 2012 (in a research note from Bank of America, apparently). (more…)
Posts Tagged ‘IPOs’
Posted in Asset Allocation, Bonds, Stock Investing, Tid Bit, tagged equities, fixed income, IPOs, re-allocate, stock rally, Tech bubble, The Great Rotation, trends on February 8, 2013 | Leave a Comment »
Posted in Investors, Long-term investing, Mutual Funds, Retirement, tagged employees, IPOs, jobs, manufacturing, public companies, publicly-listed companies, retailers, unemployment, US corporations, US listed firms on October 17, 2012 | 1 Comment »
A new article in Knowledge@Wharton highlights a body of research that suggests that the universe of public companies is very different than in the past. There are, for example, 44% fewer publicly-listed companies on U.S. exchanges than there were only fifteen years ago. The Wharton article is a review of a range of work, including both experts who believe that we are seeing a decline in the role and significance of public firms and those who conclude that we are seeing a natural part of the business cycle. In the late 90’s, it seemed as though every small company, with or without a proven product of earnings, was rushing to cash in on IPO fever. Many of these companies subsequently failed. Today, after a decade of weak market performance and with individual investors increasingly skeptical of the stock market, it is not surprising that fewer firms are going public. The Wharton article also cites increased oversight and regulation of public companies as encouraging firms to remain private. (more…)
Posted in Active Investing, Asset Allocation, Behavioral Finance, Investors, Leverage, Long-term investing, Market Outlook, Market Timing, Markets, Risk, Stock Investing, Uncategorized, Volatility, Wealth, tagged asset allocation, Avaya, Behavioral Finance, flash crash, Groupon, GRPN, Income Investing, investing, IPO, IPOs, LNKD, long term investing, P, Pandora, Risk, stock investing, volatility, ZAGG, Zyngna on June 13, 2011 | 6 Comments »
I have not seen this type of brand name IPO trading volume for quite some time. From Groupon (GRPN) and Pandora (P) to Zynga (ZAGG) and now Avaya, the media would have you believe that investing in a brand name IPO is a quick fix for your portfolio.
Take the recent public stock offering in LinkedIn (LNKD) for example. The IPO price was set at $45 and jumped to $90 after one day of trading. As of this writing, the price is just below $73. At its current valuation, Morningstar estimates the Price-to-Earnings (P/E) ratio at 466. By comparison, the tech-heavy NASDAQ has a P/E of less than 20 (as of this writing).
Clearly, many people are very excited about the LinkedIn IPO and it shouldn’t surprise you that investors have had a long history of enthusiasm for IPO stocks. But has this enthusiasm ever paid off over the long-term? (more…)
Zoom. IPOs are making headlines again.
Ten companies completed their initial public offerings last week, making it the biggest week for IPOs since November 2007. Chinese offerings dominated, with Youku.com (YOKU), described as a “cross between the US’s YouTube and Hulu” jumping $161 in its first day of trading. That’s the largest “first-day pop since Baidu went public in 2005″ according to Renaissance Capital.
Of course, IPOs are often volatile and for every Youku, there’s a Make My Trip (MMYT). That Indian online travel planning site has suffered a big drop in the last few months. (more…)