Quote Originally Posted by Random View Post
Just another wee question. I read the book on high profit IPO strategies by Tom Taulli. It presented many reasons why NOT to invest in IPOs but wait til it goes public and the price to settle months later to account for lock out periods, underwriters holding value up, flipping etc. Do the same principles apply to the NZ exchange???? Or is this book faulty because its American based and I live in N.Z.? It pretty much single handedly has put me off buying into IPOs and instead I prefer to watch first... MRP seems to be a good example of a company whom it has been better to wait to buy than participate in the IPO. Now fingers crossed it actually goes up over time (many moons I think). SLI also seems to have done a run up and then dive.... I'm starting to think there's something in this book!

Although if you're stagging then I guess that would be a reason to get in?
Welcome Random - I'm sure with your level of enthusiasm and interest, you will do well and learn fast. I think there are two places for index funds and managed funds - those who only have a small amount to invest and want a lower risk option than owning just one or two shares and for those with no interest or time in learning to invest directly into shares themselves. Doing so simply because you can't see anything you like yourself and hoping that someone more experienced than you will do better will likely leave you with the same regrets as being talked out of XRO did. I tend to think mid-cap indices should make better investments, as shares both rise out of them when they have performed well and fall back into them when they have a glitch, so you don't tend to get left with only the biggest companies that might tend to be tied to economic growth rates overall. However, I don't use any passive funds, although I do use a few managed funds, both listed and unlisted, for easier diversification into global markets. Listed for ease of access, unlisted only for those rare exceptional boutique fund managers who own and operate their funds with greater freedom and returns.

I have almost never bought IPO's in the past 10 years, as the listing process seems to have developed into a slick formula that rarely achieves a good entry for a small investor. However, that is not to say that it will always be that way. But while there are existing listed companies without the distortionary drivers of an IPO and with a history of performance information, then I would prefer to keep buying on the secondary market.