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IPO

Hedge Fund Fortress IPO

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This is probablly the hottest IPO this year (so far). It went up 89% on its debut. But I did not jump into it because: 1) I don’t have much cash; 2) Hedge fund is the business I don’t know too much about.

I am not against shorting stocks, trading options and other exotic stuff; but these are the areas I don’t feel comfortable (math, lots of math) and don’t plan to learn it at this time. I am just an old fashioned guy, and my role model is the guy in Omaha. One of his rule is “buy the business you can understand; and the business that generates lots of cash and does not change too much over the years, e.g., Coca Cola and Gillette”.

Interestly, Mr. Duan Yongping, the legendary figure in China electronics industry, is also learning Buffett’s philosophy these days.  

Categories
IPO

Interactive Brokers’ Dutch Auction IPO

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Normally as individual investors we don’t have access to the IPOs, as they are usually handled by the big investment bankers (Goldman Sachs, Merril Lynch,…), and the IPO stocks usually are sold to the institutions (a.k.a, rich people) and they can make the easy money.

This has changed by the Google IPO in August 2004, at the time the founders (Larry and Sergin) decided to try the Dutch auction so that individual investors can get a piece. The IPO was not well received because of the not-so-good market condition at the time and confusion over Dutch auction process. This time, Interactive Brokers, will follow the path of Google for its $500 m public offering. They filed the S1 prospectus to SEC today. Here is an introduction regarding how to bid.

Recently the exchange stocks are very hot. NMX (New York Mercantile Exchange) IPO was well received.

Be aware IPO stocks are usually a bit volatile, though.