IPOs are often great investments, but not every IPO is fit for everyone. When a new start-up goes public a lot of enthusiastic investors line up, but not all are making the right decision. This deck explores areas of stock market research and business understanding that one needs to take care of in order to be successful at IPO investing. It touches up investing in sectors and themes, social media analysis, future of technology, market dynamics, investing strategies and hiring investment managers.

1. ARE YOU WIRED
FOR IPO-BASED
INVESTING?

2. What is your level of general
understanding of the market? Which way
is the S&P 500 headed?
IPOs follow the markets, of course, with a higher degree
of volatility. But when markets are hot anyway, lot of IPOs
happen. So how do you decide which ones to
participate in? Go on ...
Image from Flickr

3. Understanding sectors is
important.
An IPO in a hot sector will
likely outperform the market
by quite a bit.
KNOW SOME SECTORS WELL ENOUGH TO TAKE YOUR
PICKS? GREAT!

4. Do you make it a point to
know the IPOing company
well enough?
There’s enough data & social opinion about unlisted companies for
one to research them thoroughly. Right from their private investors
and founders’ social footprints to their growth trajectory. And then
there’s media – it often plays an important role in the success of
IPOs.
Image from Flickr

5. What’s your vision of the future! Flying
cars? Teleportation? Work from
anywhere? Genetically produced, but
healthy veggies?
Knowing WHY a sector is hot is probably more important than
knowing which sectors are hot. A single Coca Cola stock bought at
$40 in1919 is worth millions today.

6. Know the market dynamics! No. Not the stock
market. The consumer and/or enterprise
market that your investee company is
operating in.
Hyper-competitive segments see companies under constant
pressure of eroding margins. This is alright for a private company
looking for exponential growth but is a death knell for public
companies and their stocks.

7. Is it a short-
term or a
long-term
investment?
We all like to
avoid
shorting an
investment
we just
made.
So, try to think like a
dispassionate strategist
and see if you agree
with the business
model, financial
foundation and
medium-term playbook
the company seems to
be following. See if you
agree to these
strategies!

8. Do you completely
depend on investment
managers?
It’s highly likely that your area of
knowledge and competence will
be different from that of your
money manager.
Given that you need to invest
only in sectors and companies
you understand deeply, being
self-directed could be a safer!

9. getStockal
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