Hate to say it, but 2016 may have been the time to buy. (Well, other than every year before it..) The Peninsula market has been slow. I know, because I'm hoping our house appreciates in value enough to insulate us from the eventual crash :D
It starts at a random point in the stock market over the last 10 years or so, and you get to sell once and buy once. I tried 3 or 4 times when I first found it and only beat the market once.
I did this as a Monte Carlo simulation on the Indian stock market and concluded actively managed funds and systematic investment plans are basically fleecing investors.
I subsequently only do passive index funds or buy options if I want to take a risk
Markets are very short-term, though, so you can time the market. It's just hard to time it exactly. All investors want to sell 5 minutes before the crash. It's impossible for a normal person. However, investors generally don't want to sell 5 months before the crash. On many occasions it has been widely known that something is a bubble, but people keep investing in that thing because they expect the bubble to grow a little more before it pops. If you're willing to watch the market grow for months after you've sold then I think it's possible to time the market.
This is not professional investment advice, btw. It's somewhat outside of orthodoxy. I would do my own research before trusting me.
This is simply not true. It is basically never widely known when there is a bubble, that is why there is a bubble. There are lots of false positives and false negatives.
No one has successfully timmed the market over a long period of time.
Sort of depends but historically "exits" (whether they are by IPO or acquisition) has kept a steady supply of "well qualified buyers" in the market. But the trend lines are pretty linear.
The number of new rich people created by IPOs is a minority of the aggregate demand for housing. Plenty more people are moving to the area from elsewhere.
In terms of driving housing prices up, I'd expect growth in the stock prices of the bigger companies to be a bigger deal. If Google's stock appreciates 20% (or Apple's, or Microsoft's, or a rising market helps lots of companies out 5%), that affects a much larger number of people with equity than does adding maybe 100 millionaires.
Especially if the main thing keeping a lot of people out of the market is raising a down payment, not affording the monthly mortgage. To make a down payment, you "only" need a few 100k, not millions. It's in reach for people receiving significant equity value from their employers along with strong salaries, you don't need to get boosted into the ultra-rich.
Some of it is geographic too. Apple/Google/LinkedIn impacts Mountain View, Sunnyvale and Cupertino. (Palo Alto is already through the roof) Less of an impact in the city where other dynamics are also in play.
"The number of new rich people created by IPOs is a minority of the aggregate demand for housing. "
1) A lot of new employees who make 1-2 millions (maybe not rich, but 'some money') means more demand on housing prices.
2) It does not take a lot to keep the bubble going. Less than 2% of the buyers, if they are 'price inelastic' (i.e. they'll pay whatever the asking price is) is enough to keep a bubble going. This happened in Vancouver - as soon as foreign buyers paused due to new taxes, prices fluxed quickly. They don't represent a large chunk of the buyers.
I believe it's true because regular participants in buying/selling are all taking cues from 'what goes on around them'.
If 95% of them are looking around, and 5% are just buying 'at whatever price' - those people will drive pricing.
When 'the house down the street' sells for 10% above asking, it validates all the homes sales in that environment, and gives confidence to the regular buyers that their investment is sound.
If there is ever a hint of a plateau, all it takes is for a few price-inelastic buyers to come along and 'validate' prices. Then some buy on that basis, and the pricing cue percolates through the system.
Once those people leave the market - there's no strong validation going on - and a small whiff of lack of price movement can put a chill on things, then prices can start to fall.
Once they start to fall - it's a negative signal, wallets clam up. Without a rich buyer to restore confidence ... the spiral continues.
My uncle is a Realtor, and I built the software for his one man operation (sales funnel, analytics, etc).
If you want to see when those price inelastic momentum makers have left the market, watch the trailing 10, 30 day listing to sales price ratio. 10 day trailing gives you a hint, but it should be clear as day after 30 days when you see inventory selling consistently below asking.
That's cool. FYI - Vancouver announced a major tax on foreign purchases, which did hit the market hard.
The claim was that 'foreign buyers' were not driving up prices, but clearly they were.
And the tax didn't even imply that all foreign purchases dried up, just that some would have, and the price-point of their purchase decision would have changed somewhat.
Since it was a limited release, I think a better question is how many people do you know that want/wanted a pair of Spectacles? How many people were willing to pay above retail for a pair?
This - I live on the East Coast (where they are RARE) and I'm pretty excited to get one. I learned that a bunch of my co-workers are as well -- surprisingly across the age spectrum. One is a mother in mid-30's that loves the idea of effortlessly capturing moments with her kids.
Last year I was a Snap skeptic, but their marketing is on-point.
> Atlassian's public offering this week, among the most highly valued IPOs of the year, is expected to renew Wall Street's faith in some tech unicorns and prime the market for more companies to go public. In Atlassian, investors see more of what they want - profits and disciplined spending - which may be just the confidence boost they need to embrace more tech IPOs in 2016, according to bankers, fund managers and investors.
Some larger private companies buy back shares as well to help employees with liquidity. It still sucks being relatively cash poor as an employee for multiple years when your company is valued at billions of dollars.
Don't forget acquisitions though, you don't need to be public to be acquired and those deals also cash out vested employees.
We can talk about if that's favorable or not relative to an IPO, but public offering isn't the only way out. Actually, I expect acquisition is probably a more common exit for employees than IPOs.
Never worked at a tech start up so take with grain of salt. I have been in recruiting for a few years so seen how it affects candidates monetarily. I'm answering this question based on benefit = money. Depends on the company. If the company is unstable (no profit or losing money as is a lot of tech) it's never certain. If they are already showing profit or a way to profitability I would do a year or so before you think they'll IPO. This gives you likely upside on the stock, you'll vest a portion of your stock and be able to sell after the employee lockup period. This isn't a guarantee, look at Zynga's IPO and flop right after.
My opinion maximizes on safety before an IPO exit. You likely don't want to play acquisition unless you know you'll get a retention offer from the new company (you run the key feature/product for the acquired company).
> The handful of technology companies that managed to go public near the end of 2016 have shown strong stock performances. Twilio Inc (TWLO.N), Coupa Software Inc (COUP.O), Nutanix Inc (NTNX.O) and Blackline Inc (BL.O) are now trading above their offer prices, boosting the confidence of their private peers that there is pent-up demand for such IPOs.
This is misleading. I just looked at these companies and 3 out of 4 are trading below first days closing with a clear down trend. They did see the first day pop, peaked around Q3 and falling.
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It starts at a random point in the stock market over the last 10 years or so, and you get to sell once and buy once. I tried 3 or 4 times when I first found it and only beat the market once.
I subsequently only do passive index funds or buy options if I want to take a risk
This is not professional investment advice, btw. It's somewhat outside of orthodoxy. I would do my own research before trusting me.
No one has successfully timmed the market over a long period of time.
Especially if the main thing keeping a lot of people out of the market is raising a down payment, not affording the monthly mortgage. To make a down payment, you "only" need a few 100k, not millions. It's in reach for people receiving significant equity value from their employers along with strong salaries, you don't need to get boosted into the ultra-rich.
1) A lot of new employees who make 1-2 millions (maybe not rich, but 'some money') means more demand on housing prices.
2) It does not take a lot to keep the bubble going. Less than 2% of the buyers, if they are 'price inelastic' (i.e. they'll pay whatever the asking price is) is enough to keep a bubble going. This happened in Vancouver - as soon as foreign buyers paused due to new taxes, prices fluxed quickly. They don't represent a large chunk of the buyers.
If 95% of them are looking around, and 5% are just buying 'at whatever price' - those people will drive pricing.
When 'the house down the street' sells for 10% above asking, it validates all the homes sales in that environment, and gives confidence to the regular buyers that their investment is sound.
If there is ever a hint of a plateau, all it takes is for a few price-inelastic buyers to come along and 'validate' prices. Then some buy on that basis, and the pricing cue percolates through the system.
Once those people leave the market - there's no strong validation going on - and a small whiff of lack of price movement can put a chill on things, then prices can start to fall.
Once they start to fall - it's a negative signal, wallets clam up. Without a rich buyer to restore confidence ... the spiral continues.
It'd be an interesting model :)
If you want to see when those price inelastic momentum makers have left the market, watch the trailing 10, 30 day listing to sales price ratio. 10 day trailing gives you a hint, but it should be clear as day after 30 days when you see inventory selling consistently below asking.
The claim was that 'foreign buyers' were not driving up prices, but clearly they were.
And the tax didn't even imply that all foreign purchases dried up, just that some would have, and the price-point of their purchase decision would have changed somewhat.
It depends on Fed rates.
If rates start to crawl up, you could see some crazy devaluations in housing.
Rates are historically low - so low there's a lot of leverage in homes.
A 1 point change at the low end has much more difference than a 1 point change at the high end.
Slightly higher rates + a couple of nice IPO's would be good for everyone.
Not too high though :) or else VC's will have less money for startups :)
Last year I was a Snap skeptic, but their marketing is on-point.
Then they need to IPO immediately.
The moment its demographic moves from tweens to adults is the moment a social network begins its downfall.
Facebook is doing better than ever and its demographics continue to skew older.
http://www.reuters.com/article/us-atlassian-ipo-analysis-idU...
> Atlassian's public offering this week, among the most highly valued IPOs of the year, is expected to renew Wall Street's faith in some tech unicorns and prime the market for more companies to go public. In Atlassian, investors see more of what they want - profits and disciplined spending - which may be just the confidence boost they need to embrace more tech IPOs in 2016, according to bankers, fund managers and investors.
And then there is all of the prestige and hype around an IPO (if it goes well).
0 - Sure, sometimes companies will allow employees to sell their shares to someone, usually an existing investor.
We can talk about if that's favorable or not relative to an IPO, but public offering isn't the only way out. Actually, I expect acquisition is probably a more common exit for employees than IPOs.
My opinion maximizes on safety before an IPO exit. You likely don't want to play acquisition unless you know you'll get a retention offer from the new company (you run the key feature/product for the acquired company).
This is misleading. I just looked at these companies and 3 out of 4 are trading below first days closing with a clear down trend. They did see the first day pop, peaked around Q3 and falling.