4 ms·

Related question -- How do I choose a mutual fund / 401k / pension / etc that is guaranteed never to take part in these insane silicon valley IPOs?

AndrewKemendo 10y ago
You mean insane silicon valley IPOs like: Apple Google NVIDIA Facebook Intel Netflix LinkedIn Oracle Tesla Sun Twilio Adobe Hewlett Packard AMD Something that gives you the opposite of these returns: http://www.bloomberg.com/quote/BSVX:IND http://www.bloomberg.com/quote/BSVX:IND
- sharkmerry 10y ago
  Isn't this a selection bias? You're tracking only the successes
  - pd1 10y ago
    I think that's the point, you win some, you lose some, overall you approximate the market
- thearn4 10y ago
  If I compare that to a total market index (say, Vanguard's VTI) over a few years, it honestly doesn't look explosive or anything. Why not just invest in the total market (giving no preference for the valley), and be done with it?
  - shapov 10y ago
    Really, who the hell cares about volatility, when it's your retirement at stake /s Really though, [anything that loses half it's market cap](http://www.reuters.com/article/linkedin-results-research-idUSKCN0VE1N0 http://www.reuters.com/article/linkedin-results-research-idU...) in a span of a day should not be in your retirement portfolio, and lets face it, most of these 'growth' oriented startups that go IPO, are susceptible to those losses. EDIT: Just to clarify. When I say growth oriented, I mean the companies that burn through money to get as many users as possible, without a clear monetization strategy(other than, we'll sell ads).
- troncheadle 10y ago
  Every company that you listed produces a product other than Ad Space / eyeballs. Even Facebook has diversified to sell something other than ads -- I still probably wouldn't invest, as their continued success relies on such an ephemeral foundation -- millions of people continuing to log on to Facebook every day. Smart money says that when I am 70 years old, people will not be logging into Facebook every day. If they are, great for Facebook! However you would not catch me betting my retirement money on that. Have you ever walked in to Facebook? How the hell are they going to pay all of those engineers when people stop caring about Facebook and the ad money stops flowing? Same goes for Linkedin -- unless they can make a very strong play into the recruiting space I would not bet my retirement money on their continued success. Based on what I know about recruiting I doubt that Linkedin will be able to penetrate -- if you want to be a personnel supplier for a Kaiser or a Chase Bank you need deep personal connections, you need to wine and dine, you need to go golfing. They aren't amenable to the speed dating model the internet encourages. They want a man or woman they can trust who can demonstrate their value transparently. But I digress. Snapchat sells ad space. That, to me, is not a sustainable business model. Ask traditional publishers how that model worked when the took it to the web. Won't work (in the long run) for Snapchat either. I think it's an entirely different class of business than AMD, Sun, Tesla, etc.
  - jonknee 10y ago
    Plenty of companies that sell "real products" or that you can walk into have come into trouble (have you tried walking into a Circuit City lately?). The answer is to have a well diversified portfolio so that you can capture the value of giants like Facebook and still not tie yourself to their long term prospects.
  - not_real_name 10y ago
    Seems to work ok for Google...
  - adventured 10y ago
    > Every company that you listed produces a product other than Ad Space / eyeballs. Even Facebook has diversified to sell something other than ads That's an exaggeration to put it mildly. Facebook is getting nearly all of their $22+ billion in sales from ads. They have practically no revenue diversification. Google is the same. So there's nearly a trillion dollars in market cap courtesy of ads.
- rubidium 10y ago
  BSVX:IND is pretty similar over the past 5 years to S&P 500 if you compare the two.
  - huac 10y ago
    Similar returns, higher risk profile = :(
TylerE 10y ago
Just buy an index fund that tracks the S&P or Dow
williwu 10y ago
Get self directed IRA or 401K. Then you can do whatever you want.
- JohnnyConatus 10y ago
  I have a side-project that makes getting a Solo 401k much easier. If anyones interested, PM me and I'll give you an at-cost price. I just want beta users at the moment. All plans are IRS approved, btw.
- justinlardinois 10y ago
  Can't tell if this is snark or just really bad advice.
toomuchtodo 10y ago
Buy VOO.
- SteveGregory 10y ago
  if the IPO is anywhere near the expected 25B, then it will be in the S&P 500, and a component of VOO
cmpolis 10y ago
You can look at how much exposure you have in aforementioned retirement vehicles and sell short that same amount of exposure in a brokerage account.
wdr1 10y ago
Any bond fund is unlikely to include an IPO. The S&P500 by definition is not going to include any IPOs. Likewise any sector specific fund, such as the REITs and what not.

AndrewKemendo 10y ago

You mean insane silicon valley IPOs like: Apple Google NVIDIA Facebook Intel Netflix LinkedIn Oracle Tesla Sun Twilio Adobe Hewlett Packard AMD Something that gives you the opposite of these returns: http://www.bloomberg.com/quote/BSVX:IND http://www.bloomberg.com/quote/BSVX:IND

sharkmerry 10y ago
Isn't this a selection bias? You're tracking only the successes
- pd1 10y ago
  I think that's the point, you win some, you lose some, overall you approximate the market
thearn4 10y ago
If I compare that to a total market index (say, Vanguard's VTI) over a few years, it honestly doesn't look explosive or anything. Why not just invest in the total market (giving no preference for the valley), and be done with it?
- shapov 10y ago
  Really, who the hell cares about volatility, when it's your retirement at stake /s Really though, [anything that loses half it's market cap](http://www.reuters.com/article/linkedin-results-research-idUSKCN0VE1N0 http://www.reuters.com/article/linkedin-results-research-idU...) in a span of a day should not be in your retirement portfolio, and lets face it, most of these 'growth' oriented startups that go IPO, are susceptible to those losses. EDIT: Just to clarify. When I say growth oriented, I mean the companies that burn through money to get as many users as possible, without a clear monetization strategy(other than, we'll sell ads).
troncheadle 10y ago
Every company that you listed produces a product other than Ad Space / eyeballs. Even Facebook has diversified to sell something other than ads -- I still probably wouldn't invest, as their continued success relies on such an ephemeral foundation -- millions of people continuing to log on to Facebook every day. Smart money says that when I am 70 years old, people will not be logging into Facebook every day. If they are, great for Facebook! However you would not catch me betting my retirement money on that. Have you ever walked in to Facebook? How the hell are they going to pay all of those engineers when people stop caring about Facebook and the ad money stops flowing? Same goes for Linkedin -- unless they can make a very strong play into the recruiting space I would not bet my retirement money on their continued success. Based on what I know about recruiting I doubt that Linkedin will be able to penetrate -- if you want to be a personnel supplier for a Kaiser or a Chase Bank you need deep personal connections, you need to wine and dine, you need to go golfing. They aren't amenable to the speed dating model the internet encourages. They want a man or woman they can trust who can demonstrate their value transparently. But I digress. Snapchat sells ad space. That, to me, is not a sustainable business model. Ask traditional publishers how that model worked when the took it to the web. Won't work (in the long run) for Snapchat either. I think it's an entirely different class of business than AMD, Sun, Tesla, etc.
- jonknee 10y ago
  Plenty of companies that sell "real products" or that you can walk into have come into trouble (have you tried walking into a Circuit City lately?). The answer is to have a well diversified portfolio so that you can capture the value of giants like Facebook and still not tie yourself to their long term prospects.
- not_real_name 10y ago
  Seems to work ok for Google...
- adventured 10y ago
  > Every company that you listed produces a product other than Ad Space / eyeballs. Even Facebook has diversified to sell something other than ads That's an exaggeration to put it mildly. Facebook is getting nearly all of their $22+ billion in sales from ads. They have practically no revenue diversification. Google is the same. So there's nearly a trillion dollars in market cap courtesy of ads.
rubidium 10y ago
BSVX:IND is pretty similar over the past 5 years to S&P 500 if you compare the two.
- huac 10y ago
  Similar returns, higher risk profile = :(

TylerE 10y ago

Just buy an index fund that tracks the S&P or Dow

williwu 10y ago

Get self directed IRA or 401K. Then you can do whatever you want.

JohnnyConatus 10y ago
I have a side-project that makes getting a Solo 401k much easier. If anyones interested, PM me and I'll give you an at-cost price. I just want beta users at the moment. All plans are IRS approved, btw.
justinlardinois 10y ago
Can't tell if this is snark or just really bad advice.

toomuchtodo 10y ago

Buy VOO.

SteveGregory 10y ago
if the IPO is anywhere near the expected 25B, then it will be in the S&P 500, and a component of VOO

cmpolis 10y ago

You can look at how much exposure you have in aforementioned retirement vehicles and sell short that same amount of exposure in a brokerage account.

wdr1 10y ago

Any bond fund is unlikely to include an IPO. The S&P500 by definition is not going to include any IPOs. Likewise any sector specific fund, such as the REITs and what not.