Investment BS Thread - Stocks/Futures/Mutual Funds/Bonds/Commodities/Options/ETFs/401ks/Etc

Watching the upcoming Pinterest IPO. For some reason I like this company.

 

Boeing sinks on downgrade. Might be a good buy opportunity after their earnings on the 24th. (Betting it will sink more after earnings release)

ROKU still incredibly volatile.

 

I saw a segment on it, running at a loss for 2018 but turned a profit in q4. It is a IPO priced under $20 a share on recognized brand I think makes it attractive.

 

Share price doesn't matter, you need to look at the market cap to see what the "valuation" of the company is. If you have 1 share at $1,000 or 1,000 shares at $1, your company is still worth $1,000.

 

I think they are actually valuing Pinterest lower than expected though (reflected by the lower share price x outstanding shares).

 

Well one of the few things I learned from finance class in college is that IPOs tend to underperform the market within the first 1 or 2 years. It's tough to find an IPO that is going to be a winner. So far I think YETI is the only IPO I've seen that hasn't gotten dogged. APRN, SNAP, DBX, others I'm not remembering.. have all not fared well.

Did you see LYFT was butthurt about Morgan Stanley allowing short sales for investors that were "locked in"? Funny, they want to have their cake and eat it too, it seems.

 

I just can't get past the fact that those allowed to "buy into" the IPO at the initial price can immediately sell (those that got LYFT for $72). That definitely causes the share price of IPOs to drop quick. I think the early investors have to wait 6 months before they can sell shares, but those that get in at the IPO price aren't constrained. It makes no sense, buy LYFT at $72, it opens at $87, dump your shares, make money. Seriously pisses me off.

 

I think the whole IPO nonsense is set up stupidly in the first place. Like, if this is supposed to be an "initial PUBLIC offering", why do some institutional investors get to "get in early" before everyone else? How on earth does that make any sense? I don't care if a certain bank was involved in the underwriting. Pay them a flat fee based on market cap and be done with it.. none of this share manipulation shit before it even goes public.

 

I guess we just need to get rich enough to be invited into the IPO. Then get richer dumping the shares the minute they start trading. What a dumb system lol

 

Sorry in my brevity I should clarify what I was trying to say - the price of ownership, the entry level of $15 a share stock versus a $1500 is attractive marketing. The smaller cash outlay invites/makes more comfortable risk taking.

 

This is true. That is the main reason stocks do splits. It brings a more affordable price per share to the table for retail investors. I have argued this on this thread and been called out for it. I will continue to say that if Amazon did a 10-1 split, I might buy a few shares (maybe a few hundred dollars worth), but I don't want to lock $1,500+ into a company that doesn't pay dividends.

 

^ Having said that, I do of course understand that a 5% increase or decrease is exactly the same if the shares are $10 or $1,000 each (assuming the principle holding amount is the same).

 

Yeah but there are barriers to entry. One share of AMZN could take up a huge amount of someone's portfolio weight. Not good IMO. That's why I'm not a big fan of index funds because tech stocks are still massively overweight. Overweight stocks change diversification dynamics. For instance VIIIX contains hundreds, maybe thousands of companies, but AAPL, alphabet, Amazon, MSFT take up 5% or so of the portfolio alone.

 

I think liquidity also comes into play. If you want Amazon, and it's $2,000 a share, your position is either $2k, $4k, $6k, etc. That kind of sucks if you want a holding weight that is impossible with that share price. That is what I mean by liquidity, you have to get rid of that big chunk, or buy a big chunk. You can't sell just a little to get your weighting where you want it.

I have heard that you can buy partial shares, but my brokerage doesn't have that. I guess that might make it easier.

 

Index funds have won for so many years, you wont find a better option for long term gains.

 

Here you go. VIIIX contains 507 stocks, yet here's the first 10 holdings taking up 22% of the portfolio.

 

we heard you the first 500 times

 

If you like being paid dividends this isn't a good option. I think the S&P (SPY) pays like 1.5% and only pays quarterly.

 

Haha you are young , you will learn.

 

Yea not looking for dividends yet, I'm not THAT old.