One day, you fire up Google Finance to check on your favorite investment. Maybe it’s Netflix (NFLX). You see that the share price is up $2 or down $10. Maybe even both within a one-hour period. Why is that? Who decided that? You did. Well, you and a few million other people, including me.
Uber… Spotify… Airbnb… These companies offer super-popular services and could make great investments for your portfolio. But there’s just one problem: They haven’t had their IPOs yet. In fact, the entire IPO calendar for 2017 is unusually bare. Why is this?
This year, you had to be living under a rock if you didn’t hear about social media company Snap’s (SNAP) stock market debut. When the company held its initial public offering (or IPO) on March 1, 2017, it raked in $3.4 billion. This made Snap one of the tech industry’s biggest IPOs — ever. Very early-in investors could have made millions of dollars from Snap’s IPO. But are IPOs worth your time and money?
Pure and simple, it’s the most trusted mantra of the investing world: Buy low and sell high. But when it comes to buying low, how do investors find the best opportunities? Sometimes Wall Street hands them to you on a silver platter.
There are many competing investment theories about how to find the “best” investments based on your time frame, risk tolerance and specific objectives. One approach, dating back at least to Benjamin Graham’s 1949 book, The Intelligent Investor, is to identify “undervalued stocks” that for one reason or another are selling at prices far below their underlying values.