You can benefit multiple ways on this idea – Fat Tail Daily

We’ve made the case over the last week or so that the potential Starlink IPO this year could be the biggest in history.

According to James Altucher, we’re going to find out. It could be as soon as this May.

And he’s found an intriguing way for you to gain backdoor exposure here, before it goes public.

Famous IPOs have reshuffled the modern financial landscape.

They’ve created immense wealth for the lucky ‘insiders’.

But the ordinary investors tend to be shut out.

This is what makes the tactic James has devised for you here so interesting…

But let’s take a step back and look at things from a different perspective.

IPOs tend it get a bad rap amongst investors. (An IPO is when a new company “floats” on the stock exchange.)

The cynical view is that every company that comes to the market is already hyped up and trading on a rich valuation.

Insiders and private equity are also probably selling out, leaving Joe Public as the sucker.

Like a lot of things in life, sometimes
this is true…but it often isn’t

At its most basic, an IPO is a way for a company to raise money.

They have some reason for wanting this capital…like an expansion plan, growth strategy or plant they need to build.

Sometimes the IPO is a success (the share goes up from the start)…and sometimes it isn’t (the share price goes down).

But the market is dynamic too. An early IPO success could stumble later. An early dud could become a screamer.

In fact, a dud IPO from 2020 was Nuix [ASX:NXL].

It was a shocker…but it led to one of the best results I’ve ever delivered as an equity analyst to my readers.

Look at this one scream up last year…

If you think about it, every stock has to IPO to start trading on the stock exchange.

So every winner on the market now…like ProMedicus [ASX:PME], Rea Group [ASX:REA] or CSL [ASX:CSL]…made any early IPO investor incredibly rich if they still hold today.

Here’s the other thing…

And while all investing carries risks, there are ways to benefit from IPOs even if you don’t buy the direct company in question.

How so?

I gave an idea on this to my readers back in late 2023.

Who makes IPOs happen?

Investment banks!

What do they get out of it?

The answer: juicy fees.

Here’s the thing…

You might not know this, but IPOs on the ASX have been weak since the boomtimes of 2021

Here’s a chart I showed my readers back in late 2023…

You can see how bad 2022 was…and 2023 wasn’t much better (Virgin never came to the market).

Here’s what I wrote in that issue at the time…

‘Sentiment and share declines meant investor trading declined. Mergers and acquisitions were subdued. And there were barely any Initial Public Offerings and/or equity raisings for them to generate fees…

‘Why position around this now?

‘Investing is an art, not a science.

‘We need to try and anticipate what tomorrow looks like, not bet on what we’re looking at today.

‘I think it’s a reasonable proposition to see a recovery in new ASX floats and capital raisings over the next three years, plus heightened deals and dollars, as market confidence recovers.’

The ASX said that companies raised $4.1 billion in 2024, a threefold increase from 2023. The ASX has since hit an all-time high.

The recommendation in that issue I mentioned — MA Financial [ASX:MAF] — is now up 73%.

Anyone who took the idea now has a ripping business in their portfolio with multiple ways to keep paying off.

However, I’m not here to pitch you MAF. It’s the idea behind it that matters now.

The big point:

You can benefit from IPOs in more ways than one. MAF benefits from increased capital for its credit funds because it generates management fees. That wasn’t happening back in 2023.

More importantly…

How to play this kind of idea now?

We told you above. James Altucher thinks you can benefit from the biggest IPO of all time. Just go here to find out how.

Best wishes,

Callum Newman,
Editor, Small-Cap Systems and Australian Small-Cap Investigator

***

By Murray Dawes, Monday, 10 March 2025

On Friday, the last bank holding up the fort finally started to show signs of cracking.

Commonwealth Bank of Australia [ASX:CBA] has seen an immense run to what many consider is overvalued territory over the last year.

My view is that the flood of passive money is causing these huge trends and momentum chasers add to the strength of a trend as prices rise.

But what happens when the music stops?

Perhaps we are about to find that out in CBA now that momentum is finally starting to weaken.

I showed you a chart comparing the Australian financial sector with the Australian dollar vs the Japanese yen (AUDJPY) a week or so ago.

The correlation between the two charts over decades is nothing short of spooky in my view.

Now that the AUDJPY is trending down there is an added weight of pressure on Australian financial stocks as international flows could start to reverse.

If the rally in CBA was really just hot air on the back of passive money and momentum chasers, we could see a sharp fall when that trend reverses.

Watch out below.

Regards,

Murray Dawes,
Editor, Retirement Trader and Fat Tail Microcaps

All advice is general advice and has not taken into account your personal circumstances.

Please seek independent financial advice regarding your own situation, or if in doubt about the suitability of an investment.

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