Considering IPOs? Read This First

Came across an interesting article at TheStreet.com. Remember that when an IPO is issued these days, it's a way for the company to raise cash when other methods have dried up, or, the principals are looking for ways to increase capital to maintain growth. Going public has its disadvantages, such as creating pressure to outperform in their respective sectors. Be aware that usually IPOs carry an expectation of longer term growth, as opposed to short term gains, unless you can get in on the initial offering action.

Private Equity Cheat Sheet

Want to better understand private equity deals? Here is an article, courtesy of CNN Money that gives a primer on some terms.

Interested in the Blackstone IPO? Think Again...

It's interesting to note the fanfare over the IPO offering of Blackstone, however, reading through the S-1 SEC filing, there are a few red flags to potential investors. Although there has been an improvement in their management fees in the past few years, this may not be sustainable, and essentially the offering does not give control to shareholders. This is in the management only, not the funds. Refer to this CNN Money article for details. Blackstone is trying to get the best of both worlds, without having the liability of having to perform for the investors.

Of course, the hype will run the price up, however, if you don't get in on that action, look for holding on to the stock for the long term.

Self-Directed Investing – Common Mistakes

This interesting information courtesy of Fisher Investments;

1. Underestimating time horizon for your assets – How long do you think you will live? How about your spouse? Most people are far too conservative in estimating the length of their lives, and that can be a problem when planning your future.

2. Misaligning investment objectives and portfolio strategy – Aligning your portfolio strategy with your objectives is a critical factor in determining long-term investing success. This may sound obvious, but many investors employ strategies that work against their objectives.

3. Confusing income needs with cash flow needs – Income and cash flow are not the same thing, although many investors think they are. In fact, the two different concepts and distinctions between them are extremely important.

4. Overlooking unintended risk factors – Managing a diversified portfolio of assets can be fraught with hidden risks many investors aren’t aware of. Too often, we find that portfolios are over-exposed to certain risk factors that were never recognized.

5. Ignoring foreign securities markets – The US isn’t the only country worth investing in. In fact, it only accounts for about half of the value of world equities in terms of market capitalization. As a result of globalization, there are a great number of innovative companies and investing opportunities available to take advantage.

6. Forgetting the fundamental importance of supply and demand – The fundamentals of supply and demand of securities are easy to overlook. Analysts and pundits cite an endless list of theories about what mechanisms drive stock prices. But the simple fact remains: supply and demand of securities will always be the fundamental driver of share prices.

7. Making investment bets based only on widely known information – What sources of information do you use when considering an investment? With the possible exception of the “hot tip” that you pick up at a dinner party, your information probably comes from sources that are widely available.

8. Experiencing overconfidence in your investing skills – When investing your personal assets, it’s natural to experience a lot of emotion as you watch the ups and downs of the markets each day. After all, it’s your financial future you’re dealing with. But, for that reason, a slew of cognitive biases come into play, clouding people’s judgment and hampering their ability to make rational, impartial decisions.

Check out the site, and read up further. There is some good information available.

New Link Added

Here is an interesting site that will give some insight into India as an emerging market, and gives relevant stock/share info. Given the move to a global market, this is a good link to have.
Check it out.

What Happened with the DJ This Week?

Doing my weekly review of articles, I came across this one, which explains the technical glitch in the DJ computers and what really happened. Interesting read...you would think that this kind of thing would have been taken into account already!!

Airbus Problems – Can a Change at the Top be far Behind?

UPS cancelled its order for the freight version of the Airbus A380 today, a year after competitor FedEx did. Parent company EADS has had its problems, but you can’t help but think about a possible solution to their problems, with the infighting going on.

Thinking back to a certain North American automaker, there is a person at the top that most certainly could offer something to EADs/Airbus, to help improve things over the next few years. Although Mullaly has only been at Ford for a few months, it is possible that since his entrance to the top job at Ford, that he may have second thoughts with the ability to turn the company around in the next year or 2, given the latest sales results, mortgaging the company, etc. Ford has said that it expects to turn around to profitability in 2009…if Mullaly can pull that off, wouldn’t a move to EADs/Airbus be the next logical solution, to moving up the corporate or industry ladder, especially given his background in aviation?

Ford had made the big step by bringing an outsider…could they continue on, if Mullaly left for bigger and better things at Airbus, his former company’s nemesis? Anti-competition issues aside, I am sure that Airbus would love to have Mullaly at its helm, and I am sure that Mullaly himself would seriously consider abandoning Ford, given the recent developments at Airbus/EADs.