Why I Never buy IPO Stocks

Now, why don’t I ever buy IPO stocks, and by the way if your new to investing an IPO is an initial public Offering, it marks the first time often private companies finally start to issue out shares, and you and me, can financially go ahead and invest into them.

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1. IPOs and the Game of Odds
- As we know the goal with investing is always to make money, either in the short or the long term, but the basic idea is, whatever I put in, I want to get more of
- And we also understand that the stock market is based on demand and supply, the more demand a stock has the higher the price
- And the less demand a stock has and people start selling, the lower the price can actually go

Lastly:
- All of us know that in order to make money from the stock market, you have to buy the stock, the company at a fair price ( and it also has to be a good company, so the money can continue to grow and pay you more money )
- You should also know that there are around 2800 companies for sale in the US stock exchange

Here is where the game of ODDs come in:
- If I buy an IPO, I’m saying this one Company is better than the other 2800 companies ( that’s a 1 in 2800 chance )
- If I buy this company, that’s is being pushed by the media, investment banker, and also the public ( most likely I'm going to overpay for it )
- If I buy a company that has been private for a very long time ( the management, the people selling the shares, have a massive advantage over me in information )

Conclusion: buying an IPO is expensive, risky, and also usually a bad idea

2. But why do people buy them
- I think their three main reasons
- People want to make quick money ( cheap then expensive)
- FOMO
- Financial Market pushing the heck out of it

Here is why: Underwriters and investment bankers
- When a company goes public they can expect to pay somewhere around 5% to underwriters and investment banks in fees ( so obviously these people want to get paid )
- So when you see a company being sold for 58Billion after IPO
- Most likely they had to pay 5% towards fees, ( 2.8 billion fees)
- So it makes sense to push it

People want to make quick money + FOMO
- I remember when I was in college a friend of mine said Tommy I'm going to invest in the snap chat the minute it goes public
- He did and he lost money and then he sold
- But it was marketed as a really big thing and he didn’t want to miss out

Tip: if he understood the company and its value, he could have bought more and waiting and make of money ( I'm not saying it’s a good investment).

3. The truth is this:
- I don’t buy things that are being heavily pushed and also are very overpriced because of all the hype
- Everyone loves posting their gains and never their losses
- If I were you, I wouldn’t do it

Tip: advice from warren buffet, when buying a company you should be able to write on one piece of paper why you are doing it

And you should rely on other people to tell you to invest, most of those people on youtube don’t know how to value a company. So here are three books that will help you ( this is just the start )

But if you want to invest the way invest link down below

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*Some of the links and other products that appear on this video are from companies in which Tommy Bryson will earn an affiliate commission or referral bonus. Tommy Bryson is part of an affiliate network and receives compensation for sending traffic to partner sites. The content in this video is accurate as of the posting date. Some of the offers mentioned may no longer be available. I'm an Accountant but I'm not your Accountant, always review information with your Accountant/CPA and your Financial Advisor.

[yungfresh]

What's a good stock that pays good dividends?

[YwdThaKamp]

Keep going bro ur feeding the community

[danfazylov]

Great books. I would add also “A random walk down Wall Street” by Burton Malkiel.

[haimeedwards]

FANTASTIC VIDEO TOMMY 😃😃😃 A few things I liked you said one of the disadvantages is information that one is deeply important So that means as a individual stock picker we really gotta look into the management part of it cause they will know info that we do not know. And tommy it's because it the sheep mentality I'm not gonna follow the crowd so I'm good on that cause if there is no analysis or research involved in your decision and your doing it cause everyone saids so or media saids so than your not really investing your just speculating and following the crowd with a herb mentality and I'll say it again I do not respect business people and that includes warren buffet me personally I don, t like or respect him either To me tommy I would rather listen to you then listen to him cause your a genuine person and I love you for that. And I know what your gonna say greatest of all time I know but I RATHER listen to you and your advice and at the same time still make my own choices and decisions and do my own research. Cause again I am a independent thinker so. I do not want Warren buffet help but I did read the intelligent investor same thing I rather listen to bejamin Graham then listen to warren buffet since he is the one that taught him so Technically bejamin Graham is better then warren buffet see 😉 that's why he is the grandfather and another thing that quick money I agree 100% that's why and I did not need warren buffet or anybody to help me figure out what kinda investor I am I just looked inside myself and use common sense if I know time moves forward and that long term ima long term investor short term personally me my opinion does not matter to me cause I want that long term something that will last longer or forever. Nothing wrong with short term it's just long term makes more sense to me and also TOMMY YES If you do not know what your investing into DON, T DO IT. I say it all the time 😃😃😃 do your research know what your investing into. But tommy I will say one thing about index funds undeniable fact it's good also undeniable fact it's good low cost wise but I still choose to be a individual stock picker cause index funds do not get the wrong idea index funds will definitely be 100% part of my investment 100% but I still choose to be a individual stock picker cause I wanna know 100% exactly what I'm investing into. All about making sure you research and analyze the company your investing into So yes tommy I agree fuck all the hype and all that BS never follow the crowd and as for fear of missing out there will always be another opportunity. So And plus again I'm not about to follow the crowd so. Again like buying another phone i don, t need to buy another phone all the time Yall can do that and I don't care what the media or how much hype you put into it ima still be like okay Now that we got the Hype bullshit out of the way now time to actually analyze and research what I'm getting into. So once again Awesome video tommy 😃😃😃 and trust me I appreciate what your doing But I don, t care what you say tommy I rather listen to you then take Warren buffet advice to me I listen to you over him anyday me personally

[Carvel]

Hard to take financial advice from someone that still lives with their mom