S"ometimes I think that all the good things in life are reserved for the cool kids, the in-crowd, the secret handshake club. When it comes to investing whether in real estate, private equity, or stock market it appears that only few well-heeled investors get all the good recommendations and the rest of us are left trying to figure which of the scraps will make the most money for us.
Actually, there is a way to piggy back on the picks of these high-net worth investors. The magic word is "private placement." In a private placement a company offers its shares to selected, accredited investors at below market prices. The company raises money for its ventures and the investors get shares inn an up-and-coming company.
For some reason and I do not know why as soon as the private placement is complete and the news published the shares take a dip in price. It is only five or ten cents per share and it only lasts for a few days but the price almost always has a temporary decline. So, now the average retail investor can step in and pick up the exact same shares from the exact same company at a lower price than the white shoe, country club millionaires. Think about it, you can get a better deal without having to know the secret handshake or disclose your net worth or income.
Plus, this also follows another rule of speculation. "He who raises the most money wins."
Whether you are looking for gold or a cure for cancer you need money to make it happen. If you cannot develop the mine or perform testing your company is going nowhere. So it stands to reason that the companies that can convince investors to trust them with their money will be around a lot longer than those that cannot. So this makes the private placement an even better indicator for speculators.
Actually, there is a way to piggy back on the picks of these high-net worth investors. The magic word is "private placement." In a private placement a company offers its shares to selected, accredited investors at below market prices. The company raises money for its ventures and the investors get shares inn an up-and-coming company.
For some reason and I do not know why as soon as the private placement is complete and the news published the shares take a dip in price. It is only five or ten cents per share and it only lasts for a few days but the price almost always has a temporary decline. So, now the average retail investor can step in and pick up the exact same shares from the exact same company at a lower price than the white shoe, country club millionaires. Think about it, you can get a better deal without having to know the secret handshake or disclose your net worth or income.
Plus, this also follows another rule of speculation. "He who raises the most money wins."
Whether you are looking for gold or a cure for cancer you need money to make it happen. If you cannot develop the mine or perform testing your company is going nowhere. So it stands to reason that the companies that can convince investors to trust them with their money will be around a lot longer than those that cannot. So this makes the private placement an even better indicator for speculators.