Any investment is risky, IPOs more so...would you buy a car sight unseen based on a good review and the premise that if you don't get it now at this never-to-be-repeated LOW LOW PRICE, you'll live to regret it? IPOs don't really trade off of calculated risk, it's all about cashing in while you can.
Somewhat off subject- I do a bit of reading about what's going on in the financial world since I'm interested in what's going on with the euro/EU situation, and I came across this today-
Door Opens For 2-Year German Bond Yield To Go Negative
NEW YORK (Dow Jones)--For the first time, the two-year German bond yield may dip below zero, a rare occurrence in the global fixed-income universe and one that flags growing fears over the future of the euro zone.
As fears are rising over the prospect of Greece leaving the euro zone, global investors have rushed into assets they perceive as the best to protect their capital. Bunds and U.S. Treasury bonds have been the primary safe harbor, and the strong demand has sent yields, which move inversely to their prices, to record or near-record lows.
The most striking manifestation of that this week is the two-year German bond's yield, which Wednesday touched a record low of 0.02%. At the same time, Germany sold a same-maturity bond with a zero coupon, basically allowing the nation to fund itself with almost free cash.
Given the yield's proximity to the zero barrier, some fund managers and analysts say any signs of further stress in the euro zone could send it into negative territory. That would mean some investors are willing to incur a small capital loss in exchange for the market's safety and liquidity, as riskier assets like stocks could fare much worse if the crisis deepens.
"It is quite possible that in a panic situation, people would pay for safety," said Stuart Thomson, a fund manager who oversees about GBP72 billion ($113 billion) at Ignis Asset Management in Glasgow. "Clearly, if there is a crisis with Greece withdrawing from the euro zone, it is highly possible that the bund yield would go below zero."
In recent trade, the yield on the two-year German bond known as the schatz, was 0.034%, trading lower than the 0.293% yield on the two-year Treasury note, 0.248% on the two-year U.K. gilt and 0.104% on two-year Japanese government bond.
So far, negative bond yields have occurred with the debt of several nations, including the U.S., Japan, Switzerland and Sweden. But typically it has been seen in securities maturing in one year or less, such as was the case with U.S. Treasury bills, not a two-year maturity.
Longer maturities with negative yields also exist for Treasury inflation-protected securities, but unlike the conventional bonds, a negative TIPS yield doesn't mean investors take losses to hold the debt because the value of TIPS will be adjusted by the future inflation rate.
Steven Major, global head of fixed-income research at HSBC Holdings PLC, said the two-year bond's yield falling to negative 50 basis points or even negative 100 basis points "is not impossible," especially if a scenario emerges that the euro zone breaks up and Germany brings back its own currency.
Calling this currency-redenominated risk, Major argues there are some investors that would hope to make 30% to 50% in currency gains on the resurrection of the deutsche mark. For buyers who bought the two-year bond auction Wednesday, a negative yield would be offset by significant capital gains from price appreciation, he said.
Others, however, are seeing Germany's extra-low bund yields as a deterrent to buy. John Stopford, London-based co-head of fixed income at Investec Asset Management, which manages $100 billion in global assets, is buying higher-yielding Norwegian government bonds as an alternative safe haven. And Pacific Investment Management Co., one of the world's biggest money managers, has been cutting back its holdings of bunds due both to the market's overvaluation and what it sees as the longer-term concerns over Germany's fiscal health.
Scott Mather, the head of global bond portfolio management at Pimco in Newport Beach, Calif., argues that to save the euro zone, especially to keep Greece in the bloc, Germany will be forced to spend more taxpayer money to support Greece and other peripheral euro-zone countries. And under a scenario where Greece leaves the euro zone, the ensuing defaults on its euro-denominated debt would subject Germany to financial losses on the money it has plowed into the Mediterranean country over the past few years.
"Germany's balance sheet will not be as pristine as it is. This is a longer-term risk, but it is something investors need to be aware of," said Mather, even as a deepening crisis would mean in the short term that investors might continue piling into bunds at these extremely low yield levels.
I experienced the dot-com crash a little differently than most. I was a legal messenger at the time, and about six months before the crash was widely publicized there were tons of antitrust suits involving IPOs that were essentially pyramid schemes. I'm no financial wizard, but it seemed to me that people should have been a little smarter than to invest in companies that had no real salable product short of an idea and a web page.
That's the kind of greed that I'm talking about. Does it apply to Facebook? I guess it depends on how the stock was represented and the motives of the buyers.
“Your legs are as skinny as those table legs,” he said. “Then go fuck the table,” she replied.