Investing 102

[SSLance]

Just had an interesting email show up in my inbox, I bet several of you did as well. It is in regards to a company going public and the email is an invite to participate in the IPO. It is kind of a "friends and family" deal but the company is including their customers on the friends and family list.

I'm torn, and this is probably more of a "gamble" type investment than an "investing 101" type investment...but I like the company and I like their products which are hugely successful. One just doesn't know if the success will continue and show itself in the growth of the share price.

There are limitations that are included with the email about how to share it so I won't share it here, but I'm curious if anyone else got it and what do you think about it?

[WSSix]

I haven't received anything like that, Lance. I'd approach it as a gamble possibly since I'm not sure what company you're talking about. If they make a good product that is popular, I think I would seriously consider taking the gamble if I had some money to play with.

Of course, I'm assuming this isn't some sort of scam, right? I watched Wolf of Wall Street couple weekends ago so yeah...

[SSLance]

Well, a quick google search shows it's not totally secret...

http://www.reuters.com/article/2014/...0EM0Y620140611

I think you have to have a link from the email to get into the friends and family deal though...

[gearheads78]

Originally Posted by SSLance

Well, a quick google search shows it's not totally secret...

http://www.reuters.com/article/2014/...0EM0Y620140611

I think you have to have a link from the email to get into the friends and family deal though...

I don't see that as a long term money maker. Might pop and catch a wave up but it could flop just as quick.

[GregWeld]

Originally Posted by SSLance

Well, a quick google search shows it's not totally secret...

http://www.reuters.com/article/2014/...0EM0Y620140611

I think you have to have a link from the email to get into the friends and family deal though...

I'd be all over it. But keep it real. Only money you can truly afford to play with.


In 2004 I invested in a start up. That $385,000 returned $20M in 2010. So it's okay to take on risk if the rest of your life is good to go.

[WSSix]

I would too now that I see who it is for. I think it might turn out good. GoPro has really done a lot with their cameras.

[SSLance]

Originally Posted by GregWeld

I'd be all over it. But keep it real. Only money you can truly afford to play with.


In 2004 I invested in a start up. That $385,000 returned $20M in 2010. So it's okay to take on risk if the rest of your life is good to go.

Well, my brokerage house doesn't have access to the pre-IPO shares, so it looks like I'll have to open an account with Level3 to get any of the pre release shares or just buy it on the open if I want.

I still haven't decided what to do...

[GregWeld]

Originally Posted by SSLance

Well, my brokerage house doesn't have access to the pre-IPO shares, so it looks like I'll have to open an account with Level3 to get any of the pre release shares or just buy it on the open if I want.

I still haven't decided what to do...

Typically, in order for any brokerage to offer IPO's you have to be a pretty big customer. Perks like that usually start when your account is 10MM plus.

[GregWeld]

Home sales info just came out this morning and they're UP smartly.... even though there is some "moderation" in housing price RISES... and that's because the inventory is up.

I put this house up for sale the middle of May and it sold in TWO HOURS for almost full price... and the only item I had to fix on the inspection was to have the A/C serviced. The buyer is all cash - no contingencies. This seems to be the "norm" according to my two buddies that are agents. I only mention this because of the real estate connection.

So what?

Well... to me - it sends up the old interest rate balloon. When people are borrowing - then interest rates TEND to rise with demand. Yet - we still have the federal government pledging to keep rates low.. We'll see how that plays out because nobody really knows.

In the meantime the "market" seems to be just going up day after day. Yipppeeee. BUT -- I'll remind everyone -- the market doesn't go straight up day after day forever. So remember these fantastic days when the market turns against us.

Personally I'm all in.... I have the lowest cash positions that I've had in a number of years actually. And for now - that's worked out really well. There's an age old saying - "don't fight the fed". Everyone I talk to says their business is MUCH better... that they learned A LOT about business and managing their overhead etc during the downturn - and that they intend to keep their fixed costs in check and increase their profit. But more importantly - they learned the value of having low debt. That has to be good for the country in general.

[GregWeld]

Originally Posted by SSLance

Well, my brokerage house doesn't have access to the pre-IPO shares, so it looks like I'll have to open an account with Level3 to get any of the pre release shares or just buy it on the open if I want.

I still haven't decided what to do...

GO PRO is selling a million cameras PER QUARTER....

Here's where I'd be concerned regardless of who or what company we are talking about... doesn't make any difference if it's an IPO or a big company like APPLE.

Every QUARTER a company reports it's earnings... that's every three months guys! And every three months - they have to meet or beat the street. Sales - profits - unit sales - and on and on... have to be growing. IF not - the stock gets crushed. Never forget this key metric. The entire market is all about growth and growth gets rewarded - misses get clobbered.


So regardless of whether or not a company is selling cameras or cell phones or bread... Your investment needs to be based on the future - and what the market thinks they'll be able to do going forward. End of story.