The investors are supposed to pretend they are surprised when the analysts for the underwriters of any given deal issue Buy recommendations on the stocks.
In the forthcoming October 2010 issueof the AAII Journal, AAII Founder James Cloonan suggests looking for stocks whose average daily dollar volume is at least four times larger than your planned position.
That is why credit markets have not reflected the optimism ofstocks and are forcing corporations to pay punitive yields on the bonds they issue (see chart).
Hong Kong spent heavily to promote the issue and also offered such goodies as a 5% discount to the market value of the stocks in the ETF at the ipo (so investors got, in effect, an immediate 5% gain).
The U.S. Securities and Exchange Commission has been studying the issueof naked short-selling and even instituted new regulations in January 2005 that require the stock exchanges to report stocks that routinely fail-to-deliver.