I never like buying company that just started selling the company shares to the public. If you look back to year 2000 and now, most IPO ending up losing close to 70 percent or more of it values. When you have too much IPO, then it can lead to bear market. When there is a bear market the quality stocks are usually separated from the bad.

You don’t have to go back far if you witness the destruction of billions of dollars lost in year 2000 from IPOs. The people that think Yahoo! could go up more than 200 dollars end up losing instead of taking profits. There are some exceptions where IPO have made incredible profits for investors such as Google and MasterCard. Can Visa be an exception also? I don’t know but you are betting not investing if you think Visa would be like Google. If you must join the crowd and want a piece of Visa, then be sure to separate your long term investing from your gambling.

The Downsides of IPOs. The investment banks or mutual funds would always be the first one to purchase the shares of any IPOs. Small investors would have to buy it at overprice. The business model might not be tested yet to see if it sound and promising. The company might make money in short term but can it keep making money through years to come.

Final Thought. If you want to gamble buying IPOs, then know that with your eyes open that this is only a gamble. It is very hard to find another blockbuster IPO such as Google because no one can predict the future. If you want to buy Visa then know that you’re only gambling not investing.

I gamble in casino every month, and see many people lost money. The stupid thing that people do is betting $100 in one bet. If they bet 25 dollars then they would get 4 chances to play. It like playing baccarat and you are betting on a tie if you won then the payout would be more than 1 to 1. The possibilities of losing are just too great to bet on a tie but people still do because the reward are 10 time bigger.