Investing

[manifesto]

Any thoughts?

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[Thanhn]

Hit up DentalTown's Personal Finance Forum -- some great information there. Have you read "Rich Dad, Poor Dad"?

 

[manifesto]

Thanks I'll take a look at the forum. Yup I have.

I've also read "Only guide youll ever need for investing" as well as "Boglehead's guide to Investing"

Current portfolio:
VGK/VTI
AAPL
GPRO
VNQ

Recently became interested in flipping IPOs. If anyone has thoughts on that, please let me know.

 

[CleverThought]

My husband is a financial adviser, any specific questions I can pass on?

His favorite book is "The Intelligent Investor", it's older but still completely relevant .

 

[manifesto]

My husband is a financial adviser, any specific questions I can pass on?

His favorite book is "The Intelligent Investor", it's older but still completely relevant .

Sweet. Yes please!

So there's been a lot of IPOs this past year and 2 years. Ie. Facebook, Twitter, Go Pro, Alibaba, etc.

I've noticed they just shoot up opening day and stay up for a couple of days then go down either slightly or significantly. What I want to know is why aren't people just buying these IPOs? At first, I thought that retail investors needed to hold onto them for a while. I've since learned that's not the case as I can sell my GPRO stock anytime I want. Why don't people just buy opening day and sell at the end of the day or a couple of days later?

I'm looking forward to Virgin's IPO in a few months now and will hope to do this.

 

[mpatel24]

People do buy opening day and sell at the end of the day. They are called day-traders; a very stressful job (i.e. you could be rich one day and broke the next haha)

 

[manifesto]

People do buy opening day and sell at the end of the day. They are called day-traders; a very stressful job (i.e. you could be rich one day and broke the next haha)

I think those guys are doing something different though. They trade based on breaking news, etc. I have not seen a major company IPO go down on opening day right now. I don't know how people can get stressed doubling their money in a day haha

 

[mpatel24]

"When a company goes public, the underwriters make company officials and employees sign a lock-up agreement." They cannot legally sell their stock under Rule 144 (SEC law) specified as a lock-up period. The minimum period is 90 days, but it can last much longer.

Or I think you may be referring to a term called flipping: "reselling a hot IPO stock in the first few days to earn a quick profit." This is much easier said than done.

 

[manifesto]

"When a company goes public, the underwriters make company officials and employees sign a lock-up agreement." They cannot legally sell their stock under Rule 144 (SEC law) specified as a lock-up period. The minimum period is 90 days, but it can last much longer.

Or I think you may be referring to a term called flipping: "reselling a hot IPO stock in the first few days to earn a quick profit." This is much easier said than done.

Yes I'm not talking about buying shares when it is still private. I'm talking about when you can buy it using Vanguard, Scottrade, etc. I think the flipping term is more accurate. So why is it hard? Cant you just make a market order to execute immediately on opening day and then sell whenever?

 

[mpatel24]

Just because you may have not seen a major company IPO go down recently doesn't mean this trend will continue in the future. Sometimes a company may be grossly overvalued like in the case with Castlight Health recently, a very anticipated stock to many traders. It started at 40 and within a few days dropped significantly, at one point around 5 bucks.

A lot of my friends are in business, and they constantly ramble about money, but I always remember what my father told me: Stock trading is EXACTLY like gambling. Sure, its great for side investing with your disposable income; but I just cannot imagine how stock traders use this as their primary source of income. Maybe I am too conservative and like to play it safe haha.

 

[CraigHack]

If you come to the Pre-Dental forum for investment advice, you're gonna have a bad time.

I second "The Intelligent Investor". Do some research on Kiyosaki before you decide to take his advice.

 

[manifesto]

Just because you may have not seen a major company IPO go down recently doesn't mean this trend will continue in the future. Sometimes a company may be grossly overvalued like in the case with Castlight Health recently, a very anticipated stock to many traders. It started at 40 and within a few days dropped significantly, at one point around 5 bucks.

A lot of my friends are in business, and they constantly ramble about money, but I always remember what my father told me: Stock trading is EXACTLY like gambling. Sure, its great for side investing with your disposable income; but I just cannot imagine how stock traders use this as their primary source of income. Maybe I am too conservative and like to play it safe haha.

Understood, but I've always wondered if it is technically difficult/impossible.

 

[dbd]

If it was that easy, I think a lot more people would be doing that, no?

 

[MedDevil]

It's difficult because by the time you hear about "breaking" news, the traders running HFT algorithms in New York will have beat you to the punch.

 

[techyguy]

Facebook and Twitter both skyrocketed out of the gate, and then plummeted for the rest of their first days. That's not a money winning strategy. It's not terribly innovative either, as evidenced by the fact that it's the first idea in a thread on a pre-dent forum, if nothing else.

I've seen A Random Walk Down Wall Street recommended as a book to pickup before The Intelligent Investor. I own both, but haven't finished either.

 

[techyguy]

It's difficult because by the time you hear about "breaking" news, the traders running HFT algorithms in New York will have beat you to the punch.

Yeah, here's what was making the rounds a few months ago, after the release of the book, Flash Boys:
http://www.cbsnews.com/news/is-the-us-stock-market-rigged/

And here are the heads of two different exchanges going back and forth on CNBC, just for fun:
http://www.cnbc.com/id/101544772