Practical analysis for investment professionals
28 March 2014

Weekend Reads for Investors: No Market for Old Men

Posted In: Weekend Reads

Jeremy Grantham, senior statesman at GMO, recently opined that the stock market is not yet in bubble territory, noting that the S&P 500 Index was 25% below such a threshold by his calculation. Removing any ambiguity as to his outlook for equities, Grantham added, “The next bust will be unlike any other.”

If the furious level of IPO activity is any indication, firms looking to tap into the public equity markets seem to agree that the window is closing. According to Renaissance Capital, the market for new issues has accelerated sharply in the first quarter after experiencing its best year in over a decade. With 92 filings so far this year in the United States, we are on a pace not seen since 2000.

As might be expected in any gold rush, some offerings are of dubious value and are rightfully being met with skepticism from discerning investors. King Digital Entertainment (KING), maker of the “Candy Crush Saga” game, promptly dropped 15% following its recent public debut. And Box, an ambitious yet unprofitable cloud storage firm that competes with the likes of Citrix, EMC, Google, and Microsoft, raised some eyebrows when it filed for its IPO. Earlier this week, technology entrepreneur and venture capitalist Marc Andreessen said the “track record of old white men who don’t understand tech crapping on tech they don’t understand still at 100%.” As a rule, however, when venture capitalists start looking for an early exit, investors should think twice about hanging around themselves.

Below are some stories that caught my eye in recent weeks that you may find interesting.

Strategic Thinking



Seeking Alpha v. Einhorn

Net Worth

Please note that the content of this site should not be construed as investment advice, nor do the opinions expressed necessarily reflect the views of CFA Institute.

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About the Author(s)
David Larrabee, CFA

David Larrabee, CFA, was director of member and corporate products at CFA Institute and served as the subject matter expert in portfolio management and equity investments. Previously, he spent two decades in the asset management industry as a portfolio manager and analyst. He holds a BA in economics from Colgate University and an MBA in finance from Fordham University. Topical Expertise: Equity Investments · Portfolio Management

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