November 15, 2017

IPOs once again prove Warren Buffet right – they are avoidable

Value investors as a norm do not like to invest in initial public offerings (IPO). Most of them publicly disclose their aversion to it and advice retail investors to stay away from it.

As recently as in 2016, Warren Buffett, the quintessential value investor, once again reiterated his revulsion for IPOs. 2016 was a good year for IPOs in the US but Buffett said that he couldn't care less about those who have struck it rich in the frenzy of IPO activity in recent years.

“You don’t have to really worry about what’s really going on in IPOs. People win lotteries every day but there's no reason to let that affect your investing strategy at all,” Buffett said at Berkshire Hathaway’s 2016 annual shareholder meeting in Omaha, Nebraska. “You have to find what makes sense and follow your own course.”


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