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The number of substantial disconnects relevant to stockprices and the major averages, marches ever higher, despite the facts on the ground also include the Initial Public Offering or IPO market.  Through July of this year, IPO’s are down 54% to just 54 deals raising 11.5 billion a figure some 50% less than last year, further the 2015 data was considerably less than that seen in 2014 despite a series of new record market highs.  IPO pricing and returns have also been anemic. The Renaissance US IPO Index, which tracks newly public companies for two years is down 3% year-to-date, and is some 19% below its April 2015 high.

Fresh off the latest round of European bank stress tests it would seem that investors remain far from convinced that European banks are good investments despite substantial share price declines of late rendering many an apparent bargain.  Just because something is historically cheap doesn’t necessarily make it a good buy.  In fact, Kevin Dowd, professor of finance and economics at Durham University in Great Britain went so far as to label his countries stress tests as “worse than useless”.  Acriticism leveled at post crisis bank stress tests in general as they have been and remain an exercise in putting lipstick on a pig.

This is Caleb Lawrence Registered Investment Adviser Scotts Valley Drive and Willis Road in the Scotts Valley Plaza, Suite 202 or call me toll free at 888-RICH PIG / 888-742-4744.

You can catch me on the radio at noon each business day as well on California’s central coast.  KPIG 107.5 FM in the Monterey Bay or KPYG 94.9 FM in San Luis Obispo.

Rebroadcasts, additional writings and other entries are also available on my Blog at www.clinvestments.com

Advisory services offered through Caleb Lawrence Registered Investment Adviser Inc.


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