An IPO is where you get stock in exchange for investing in actual production. Or expansion of production.
I bought CMG when it was $25. Except that, to qualify to participate in an IPO you have to be tied in to a financial organization, win a lottery, and show that you can hold on to stock without just flipping it on day 1.
So how was I able to buy it for $42 on day 1?
First, let me say that it's $636.10 right now. Second, I was a long time customer before the IPO, so I knew they had a good business plan that just needed expansion.
I was able to buy it because someone broke the rules. Not the rigid, enforced rules, but the ones that allow that person to participate next time.
That person created money from money, and is likely going to be allowed to participate in the lottery again. You might not believe in making money from money, but these people do.
On that subject, investing in actual production is how you make money from money. I have no actual skin in the game, but I have money in the game.
At the time, per share, the company had a reasonable valuation. Now, it has all of the stores that it expanded into, plus brand recognition, plus a more stable supply line. Plus all of the non-GMO movement energy. Customer loyalty, and piles of stuff that it didn't have before.
Piles of stuff that are not asset-measurable.
Now, for this:
NO OTHER PLACE, other than real estate, precious metals, art, education for yourself, a private business you start, etc.
Ever heard of a bubble? There is NO OTHER PLACE LEFT to try to save your money from being inflated away aside from the stock market which is a high risk environment. This is what happens when your central bank cartel keeps interest rates at ZERO for a decade.
Check out Zero Hedge [zerohedge.com] if you want real economic information.
So you're saying that "real estate, precious metals, art, education for yourself, a private business you start etc." are quite volatile.
Real estate is, because it expands faster than it should, then contracts. If you value it properly, it's still a great investment. Buying a house to flip it is not going to work all the time. Precious metals can be manipulated by FUD, and have no inherent value. Art will basically always get more expensive, because you set a reserve at auction. And Picasso is not making more paintings. A private business is basically either going to succeed or fail, all or nothing. Of course they are volatile.
There are no places left to the average investor, other than stocks, because interest rates are zero. T-bills, money market, CDs, interest savings, and lots of other things are losing money due to inflation.
How much money am I going to invest in real estate? I don't, as an average person, have enough for a second mortgage. Precious metals? no. Art? Can't afford. Education? I have a degree in one field, and work in another. I don't need education. Private business? I don't have enough cash to be a franchisee, so I have to place it all on a private business.
And then there's your core objection. You don't believe in the secondary stock market, where the money doesn't go to the business, but to the people who bought in early. And you oppose having someone manage your funds, so you do a little better or a little less worse than someone else - you pay someone to watch the markets and make an informed decision on what to trade. That's the little off the top you talk about, and people do notice.
But I also make my own picks, and I've been overall successful because I take the time to understand the business before buying secondary market stocks. I don't have the time to do that full time, so I pay someone to do it.
So your argument is left to pedantry, the kind where you want exclusive ownership of the now genericized "engineer" tag. well, fire up the coal engine on a choo choo train or shut the hell up.