How to crack the IPO puzzle?
There are many IPOs of local and foreign firms available and people are making big bucks! I have not been successful so far. Some people have likened getting IPOs to striking the lottery. I have tried applying twice, and I only managed to waste $4 on charges. I used Internet Banking to bid, and would anxiously wait for the results. Whenever I see First Refund, I know I have been unsuccessful. So how can I increase my chances of getting IPOs?
My colleague told me that to increase my chances, I should apply for at least 10000 lots, because out of so many lots, you can only be partially successful. However, with limited funds, this can prove to be quite tricky. My funds get tied up while waiting, and I can’t buy other shares, just in case I managed to be lucky enough to get the stocks.
I wonder anyone would care to share your experiences in getting IPOs. Do people really make lots of money out of IPOs? So far, maybe the directors are the ones who make the most as they keep a large percentage to themselves, and offer the public a tiny amount of shares available for bidding.
Sarah Tan – SingaporeProfit.com
Popularity: 6% [?]
Hi Sarah,
I’ll never touch IPO with a ten foot pole.
Reasons being:
1. No trading market history for reference.
2. I don’t know how market will react to it.
I’m a believer of marrying technical with fundamentals. If there is no charting history for me to check against, then this company is out for me.
Cheers,
Jag
I think best to enter at private placement round, before IPO. Have access to some of them if your funds are large enough (at least 6 digits)
Do they have divident reinvestment plans in the markets you’re looking at? You were talking about commissions. If you buy direct from the company, a good company you can hold forever, there is no commissions, and dividends are reinvested, also without commissions.
Warren Buffet would love something like this — because he says he likes to buy companies that you wouldn’t mind owning if they closed the stock market for five years.
Anyway, I’m not against trading. But slow and steady often wins the race, and dividend reinvestment helps you do it without paying a toll, i.e. commissions, on entry and exit. Must think long term, though.
Jag: Some people buy IPO just to make a quick buck. I think they are good for short term gain. Probably the sector where the companies come from may determine whether the IPO will do well. I think for this year, IPOs are back in demand.
HighwayBlogger: How do investors know about private placement rounds? Are there any websites that talk about them? For me, it is out of the question for the time being. Maybe that could be my 5 year plan.
Eric: Currently, I have not really learnt how to look at dividends. I’m looking at market trends, using Stochastics and candlesticks to decide what to buy.
Warren Buffet loves coca cola, so he bought stocks from there. But I just read that coca cola didn’t do well this well.
For long term investments, I think it’s more useful for investors with huge pockets as they can ride out any down periods. For small time investors like me who want to build up the portfolio quickly, the strategy is probably slightly different. Correct me if I’m wrong on this.
IPO, yeah you can make some quick money in it. Ask your broker, they know better and see whether the industry and company have strong offer or not, if you have use they product and service before and like it, then it’s a strong buy. I’m a tech guys, so i only buy tech IPO stock, i can get a sense of how far it’s can go, because i know the industry.
I agree with you that it’s best to buy something you are very familiar with. I’m not in any industry that offers stocks, so my knowledge comes from my own research, and it can be a little difficult because there are so many companies offering IPO.
I think when the economy is doing well, more of the IPOs make money.
Great, thanks! ^_^
Where do you get to hear about IPOs? Do rely I on the mainstream printed press like the Business Times and the various weekly magazines or do you find online sources like this site of more use?
And what about annoucements and road shows has anyone ever been to one of those?
Apart from some huge international IPOs likr the Agricultural Bank of China they don’t seem to make the news until they are all over