EC HH The Curse Of The IPO

The Curse Of The IPO

One of the best contrarian indicators are major IPOs (or ETF listings) in a particular sector. Looking back, the recent Coinbase IPO (COIN) appears to perfectly fit that bill.

Here’s Bloomberg on the topic:

Throughout history, initial public offerings have taken place at peaks of confidence. When the owners of a big private company think market conditions are as good as they are going to get, they will go public. And as they know what they are doing, the rest of us should take the hint.

You might remember the Glencore lPO (GLNCY) (the biggest ever listing in the UK at the time) that marked the top of the last bull market in commodities:

Or Blackstone (BX), which went public in mid 2007, right before the global financial crisis decimated Blackstone and its peers.

Piped Dream

One of the themes we’ve been tracking here at Capitalist Exploits HQ is the looming supply crunch in oil and gas. As we recently put it to our Insider Weekly readers:

The fact of the matter is there is a lack of appetite for finding and developing new reserves being echoed with other majors (who account for 30% of the world’s O&G production) and the demand for oil continues to rise. Well, it’s easy to figure out an energy crisis (or oil way above $100) will be the outcome.

You don’t have to be too quick between the ears to work out that a drop in capex corresponds to a drop in supply. Hmm… a good old fashioned supply crunch is coming and there is little the majors can do at this stage to head it off.

Well, this story keeps getting and better. Here’s the Financial Times:

Energy groups must stop all new oil and gas exploration projects from this year if global warming is to be kept in check, the International Energy Agency said.

The proposal is part of a scenario outlined in a report on ways to achieve net zero carbon dioxide emissions by 2050, a prerequisite to meet the Paris climate accord goal of limiting global warming to 1.5C above pre-industrial levels.

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Disclaimer: This is not intended to render investment advice. None of the principles of Capex Administrative Ltd or Chris MacIntosh are licensed as financial professionals, brokers, bankers or even ...

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Stock Picks 3 weeks ago Member's comment

Great read, thanks.