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This isn't a binary, just because those things are true, and because they tend to happen doesn't mean they are certainties or worth betting your whole net worth
by bwilliams18 11y ago
This isn't a binary, just because those things are true, and because they tend to happen doesn't mean they are certainties or worth betting your whole net worth on. Anything could happen. There are outside market events to consider.
- chillydawg 11y agoRight, fine. So perhaps I should re-state my criticism as: If you know this is the case, then why not bet 2% of your net worth on every tech IPO that you magically know will pop and make huge gains vs the wider market. The answer is that you cannot do this because it is NOT TYPICAL. Plenty of tech IPOs flop but cognitive bias means you only remember the googles and apples and squares and not the 50% that go south of ipo price straight after launch.
- arawde 11y agoAnyone with a solid understanding of investment fundamentals can distinguish an IPO which will flop versus one which will stay at or above market price on the first day. The SEC filings from every company before their IPO contains more than enough data to evaluate their standings as a business, and are publicly viewable. There's a reason people know things, it's not all magic.