Did Big Government RUIN The Stock Market?

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Bring back the IPO. Yeah, I want old school Wall Street. I want a return of old school Wall Street. Well, what’s that gonna take? Well, we’re gonna have to start a racing. A lot of rules, not just Dodd-Frank. I’m going all the way back to Sarbanes-Oxley. That’s right. And I called this. Called this, this again, George W. Bush pushed this thing through because we had the dot com collapse and you had to do something.

had to do something, Congress had to do something. And what they did was they wrecked, destroyed the IPO market. And again, it hurt you. It hurt you. There’s a story talking about the IPO market and the decline. They’re saying in recent years, it’s not recent years, okay? This is 25 years, two and a half decades, it’s been.

fewer companies going public. Take a look at the amount of listed companies today compared to the way it was back in the 1990s. The way companies were funded have completely changed. Has it benefited? Has it benefited investors, American investors? No. No. Yeah, there’s been some good ones. Sure. But let me

explained to you, we’re go back in time. I want to talk about the way things were from the younger people back prior to Sarbanes, Oxley, prior to repealing Glass-Steagall. There was a myriad, okay, many, many investment banks on Wall Street. Some were good, some were crooked, you know, from the movie Wolf on Wall Street. There were other ones out there as well, but they were more penny stock operators. Companies would take…

would raise money, they’d go to Wall Street, this old school Wall Street, go there, raise money, this is what we wanna do, Morgan Stanley, Goldman Sachs, a lot of different firms, DLJ, so many of them, Brown Brothers, there was so many to go to. This was our idea, they put together a prospectus, okay, they get intentions, do the road show, get people to fund it, and a stock would trade.

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The stock would trade. Some would make it, some wouldn’t. you know, I used to, my desk would have a pile of various different companies going public and it wouldn’t take me long. I could take a look at the business, the business plan. I’m like, anything ain’t gonna make it. This one ain’t gonna make it. And then during that time, during the 1990s, everyone was goo goo gaga over IPOs, anything with a dot com attached to it, FOMO.

FOMO was I gotta get involved, gotta get involved, get involved because hey, many of these companies would pop on the first day. They would, they’d be hyped up in various different publications. The internet was a new novel thing. There were message boards out there. CNBC was on every television everywhere. Every pizza par and again, everybody was all in because everything was going up. Again.

I knew that there would be fallout, because again, people went nuts. They did stupid things with their money. They were chasing companies that had little to no value. But some did.

Some did. And the difference between back then and today is back then, you could have gotten in. You could have gotten in in the infancy stages of this company. You might not have gotten in at the IPO price or maybe gotten a little bit of the IPO, but you didn’t have to wait 10 years. See how the investment banking market works today.

with private equity and how they go about doing things is essentially they ladder these companies up with multiple rounds of financing for years and years and years and they get more financing and another round of financing and another round of financing and the ultimate goal is taking it public at what I feel is an absolutely moronic valuation.

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And who buys at that moronic valuation? You do.

They’re selling to you after they basically have run the thing up to the moon.

Need to get away from that. We do that, I think we’re gonna have a much more dynamic market. Love to see more companies being able to go to Wall Street and say, hey, here’s my idea, I wanna raise some money, away we go. It was an exciting time. And did it get out of control? Damn straight, we saw it coming.

Broke columns, yield, hold on, Icarus in the stock market. Listen, somebody’s companies are good. But even some of the companies that I avoided, because I wasn’t sure, I always give the example, Amazon. And I invite you, go online and take a look at Jeff Bezos back in the day with his cardboard Amazon sign at the wall.

stuffing boxes himself with books to ship out. A of retail, online retail back in the 1990s. I remember ordering music from CD Now. Yeah, I didn’t like the whole, know, again, kids are not confirmed, but there was a file, they called it file sharing service back then. It was called Napster, eventually got put.

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out of business, was Kaza, there was another one too, and I’m like, this is just stealing. They’re just putting this stuff online and recording it, and you’re stealing people’s music. I said, this is not right, this is not fair. You know, they eventually had to deal with that. think Metallica led the way on that one. But anyway, neither here nor there. There was CD Now, there was Pets.com, there was all sorts of companies, and I didn’t know what was gonna make it. Now Amazon, they figured it out. Hey, why just sell books?

sell everything. And then again, went into other areas of business, Amazon website, later on down the line. But the reality is, is at least you could got you could have gotten in at a very, very low price back and they Google all of these companies. That’s no longer the case. I am been searching for, you know, various different

VC funds, alternative investment funds for our clients. And it’s difficult. It’s very hard for me to kick the tires on these things to see what they have in there and the various different rounds and where they’re at and whether or not these things are gonna eventually even make it. They’re gonna be able to take them public. these are the mark and these companies to market at their own mark, at least when they were trading.

The market would dictate what the share price was. And yeah, was it volatile? Absolutely. But that’s okay.

We need to get back to the old way of doing things because honestly, people, it makes our country more dynamic. It makes Wall Street a hell of a lot more fun. People, there’s a myriad of different ways that people can gamble their money away. And we spoke to people all the time. Even the IPOs back then, you had to be a, what they called a sophisticated investor.

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at that point in time to even participate in some of these things. And yeah, there was private placements and earlier rounds of financing, but nothing like today. Not this eight, 10 year nonsense that’s going on. Basically right now, and you know, we’re going to discuss this at length this weekend on the radio show. The venture capital market is, it’s gonna, it’s getting ugly, folks. They’re trying to find ways out. Everybody’s looking for exits, and they can’t find any. Watch snogginwallstreet.com