TWTR

Your point is valid, but past performance is not indicative of future performance. Just because Twitter went from $0 to $168M (which is chump change on the NYSE), that does not mean they will continue on that curve or that there's proof that they haven't already tapped their market.

No it's exactly what caused the massive asset inflation across all major assets in the US economy in the last four years. Look up the perfect correlation between the S&P and the Fed's pomo shots, and its balance sheet expansion.

But don't take my word for it. Recently the US Treasury conveniently wrote a paper admitting that the Fed was responsible for spurring the asset inflation.

The dollar has lost 97% of its value, according to the Fed, over the course of a century. That was before they were knee deep into the economy 'printing' trillions - having increased their balance sheet by 300% in five years. How can they ever stop printing while the US Govt. runs a $700+ billion deficit? They can't. The outcome is obvious.

The Fed intentionally re-inflated assets, because it's the only gimmick they have left. Once you lower interest rates to zero, there's nowhere else to go but to intentionally try to spur asset inflation and generate a fake wealth effect, which the Fed has done two other times in the prior decades. They use their POMO program, along with mortgage purchases and cheap interest rates to inflate the stock market and the real estate market. It's real simple.

There has been no job recovery. There has been no manufacturing boom. There has been no improvement in the welfare and poverty picture. There has been no improvement in incomes. And we're still missing seven million full time jobs, and millions have fallen out of the labor force.

So why are asset prices booming? The answer to that is obvious as well.

> assuming you have the same information

Which you don't, since Goldman Sachs is always a few milliseconds ahead of everyone else. Given that almost everyone else out there is going to be trading on information that has already been consumed and acted upon by privileged parties, the markets may as well for all intents and purposes be irrational.

I think you fundamentally misunderstand the process but that is ok, its not all that straight forward.

The transaction here is between risk takers (venture capitalists and investment banks) and risk pricers (people who buy stock). Nobody is getting "ripped off" as long as everyone is following the rules set down by the SEC.

Investors put money at risk. You know that because you've been here on HN a couple of years and no doubt read the is shutting down. stories. For each of those there is usually one or more investors who have put in thousands if not millions of dollars who get anywhere from $0 to some fraction of their investment back. Sometimes, their investment 'bet' pays off and they get back multiple times their investment. The trick is you blend all of those $0 and multi-X returns and you get their "effective" return.

"Joe Public" and by that I assume you mean an unsophisticated retail investor (they aren't investing anyone's money but their own). Can achieve a similar result by buying "shares" in a fund managed by a banker. When folks ask me where I would put some extra savings I tell them I've been very pleased with the Vanguard funds. You make more than then .8% return that a Bank savings account pays, and your risk is relatively moderate (but if it is not zero like it is with the savings account). But this unsophisticated person should never be investing in an IPO stock.

The professional managers who invest in an IPO stock may have hundreds of millions of dollars under management. They spread some of those over a number of IPOs as a way to provide 'long kicks' (which is that the stock is held for a long time and the success provides a large return many years later). Clearly they aren't putting their kids college fund in there. And most of the other dollars in their fund are on much 'safer' sorts of things, like Coca Cola or Alcoa.

So this is the 'cycle of life' for many new tech companies, and if these investors in Twitter do well their Venture Funds will have a reasonable rate of return, and more rich people will give them some of their 'excess' funds to invest in other tech companies, and you and I can go get some of that by pitching them a great team and a great idea.

So for the 11 times smart people came to them and they gave them millions and got nothing back, this 12th time they got a lot back. Nobody gets hurt as long as the people who don't know what they are doing stay out of the game. That didn't happen in the late 90's lets hope it doesn't happen again.

How does this work again?

"Open" is 45.10, but the graph seems to show it as 46.00, the current price is 46.02, which is "+20.02, 77.00%"? I thought the +X (+Y%) was price-open ((price-open)/open %), but it is way not adding up here.