Hot IPOs, Cold Returns?

Don and Tom examine the coming wave of blockbuster IPOs, including rumored offerings from SpaceX, Anthropic, and OpenAI, and explain why investor excitement often leads to disappointing results. Drawing on research from Dimensional Fund Advisors and examples such as Uber, Facebook, and Groupon, they discuss the historical underperformance of IPOs and the dangers of buying into hype. They then answer a listener’s question about assets-under-management fees, explaining the broader planning, tax, behavioral, and retirement services provided by fiduciary advisors beyond portfolio construction. The episode concludes with a look at the growing number of highly speculative ETFs, including UFO-themed and meme-stock funds, and a warning that investors should focus on diversification and discipline rather than chasing the latest financial product.

0:05 Summer IPO mania: SpaceX, Anthropic, OpenAI, and the hype machine
1:24 SpaceX’s massive valuation and why investors are excited
3:05 Anthropic and OpenAI join the trillion-dollar IPO conversation
4:29 Comparing today’s IPO wave to the dot-com boom
5:09 Why hot IPOs are usually a bad investment
6:27 Dimensional research on IPO underperformance and liquidity concerns
7:51 Uber, Facebook, Groupon, and other IPO cautionary tales
8:50 Why even great companies can be poor investments at the wrong price
9:45 Why disciplined firms delay adding IPOs to portfolios
10:59 How to submit questions to Talking Real Money
13:17 Listener question: Is a 1% AUM fee really worth it?
15:20 What advisors actually do beyond portfolio management
16:44 Vanguard’s research on advisor value
17:12 Why large portfolios shouldn’t pay a flat 1% on all assets
18:24 The emotional and behavioral benefits of professional advice
20:29 How advisors help investors stay diversified
21:45 The explosion of bizarre new ETFs
22:49 UFO ETFs, meme-stock funds, and speculative product launches
25:05 Why investors should be skeptical of niche ETFs and high fees

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