the Market will not like this--------
- Thread starter executioner
- Start date
Sure they can. It's just that VC money shies away from super micro caps. Look at a lot of funds, they don't even invest in stocks less than $5.
VC money is also different. I just invested in a company(my first private investment) that a VC firm was trying to buy into. They only offered him $10M for a 50% stake in the company...he only wanted to raise $500k. His company, in my opinion, will be worth 5 times the valuation of the private placement in a year or two. It's extremely likely that he'll be bought out...but the VC wanted a large interest with all sorts of terms and he didn't want it, they lose.
A lot of companies don't want to deal with VCs and who can blame them. They're essentially the "bend over and spread 'em" gang from Wall St. gone wild with private investments.
You can also consider that VCs are using clients money and have a lower tolerance for risk...I'm not sure. I met a guy at a party a while ago who I've been meaning to contact as he used to work for a big VC in Silicon Valley and now runs a podcasting company interviewing CEOs and entrepreneurs. I'd like to know more about the inner working of those places.
And a lot of funds do make insanely good returns on certain areas...but there are only so many companies and if you run a $50M fund you can't pour that into a micro cap, you might end up owning it. So your return is limited.
Chances to make great returns in a STABLE way are few and far between I've found. You pick your bets and you make them and you spread your risk around. One might lose 50% but the other returns 200% and you do okay.
I wasn't bragging....I was just retorting to stock_turder. There was certainly luck involved in my investments, I won't deny that. But I do feel I could nearly replicate it. To be honest, one of the first penny stocks I invested in actually went up well over 1000% in a matter of weeks and I saw a lot of money come and go ON PAPER. It was a brutal lesson, but a good one.
I had a friend who's roomate works for a small hedge fund and I was investing in a stock...he mentioned it to his roomate and he said that his fund looked at it and didn't like it. The stock went up hundreds of percent in a few weeks. It eventually came back down, but just because guys have better resources really doesn't mean they're not going to miss out on big gains.
Good luck.
Quote from Moneyball:
What are you talking about? One of the things I find funniest about all of these "Free money" threads is the idea that there is a textbook, unquestionable definition of "dip". When exactly do you guys "buy the dip"? When it's 5 pts., 10 pts., 15 pts., etc. in the S&P? Let me guess, you buy at the low of the day because it's so easy to see? Do you hold it for seconds, minutes, hours, days, weeks, months, years? My guess would be you hold it for as long as it takes to make a profit, right?
Saying "Buying the dip has worked since 2002" is assinine. It all depends on the time frame, what you define as a dip, etc. Didn't we have a dip or two on Monday? Well, if you bought that dip and sold yesterday or today, it didn't work, did it?
I won't even get into "it so fact so"....
I'm still waiting to hear someones definition of "dip", and how long they hold things for. Has the last 3 days not been a big enough dip for you? When would it be?
It's pretty simple to come on here saying dip buying is free money after the fact...
Watch him try and pump the DOW back up on his show. It will be critical for his credibility. He probably feels like an ass for saying the dow goes another 1000 pts....i'll believe it when I see it.
cm