Day Trade the IPO and Be Quick

To the Editor:
When I worked at a Wall Street firm, shares of initial public offerings were allocated to the brokers based on how much “syndicate” business (secondaries, in-house products, etc.) they conducted (“The IPO Stock Frenzy Is Just Getting Started. Don’t Get Burned,” Cover Story, Sept. 19). It was then up to the brokers to allocate the shares as they saw fit—usually to their best clients and surely the ones who did syndicate business. Before I retired, things were tweaked it a bit to include high-net-worth clients. If you don’t get actual IPO shares on the offer, your best bet is to day-trade the IPO—and be quick.

Ray Noack
On Barrons.com

Just Call Me

To the Editor:
Regarding “Quarterly or No? How to Argue About the Frequency of Financial Reports” (Streetwise, Sept. 19), let’s put it this way: I’m lending you my money. You better tell me what you’re up to. Call me every three months. Is that too much to ask?

Robert Lucke
On Barrons.com

Nice While It Lasted

To the Editor:
The biggest mistake that investors can make in a falling interest-rate environment is reaching for yield (“Cash Yields Are Going Down. Here’s Where to Move Your Money,” Sept. 17). There’s a tendency to take cash designated for near-term expenses and move those funds into longer-duration bond funds or more-speculative asset classes in an effort to generate a higher return. This is the wrong approach. A 4%-to-5% yield on cash was nice while it lasted, but it’s important not to lose sight of why this money is sitting in cash equivalents to begin with—mainly for liquidity and short-term obligations. Risking this capital for a higher potential return could disrupt your finances.

Jonathan I. Shenkman
West Hempstead, N.Y.

Crony Capitalism

To the Editor:
While Brian Gross feels that taking equity stakes (in return for investments) is crossing a line into crony capitalism, it’s the only practical option the government has to guarantee that critical domestic manufacturing capacity remains in the U.S. (“Crony Capitalism Stages a Comeback. U.S. Exceptionalism Will Take a Hit,” Other Voices, Sept. 19). As a national-security imperative, it can certainly be justified and may outweigh the potential risk of political interference. There are only a handful of American companies that manufacture advanced chips in the U.S.

It isn’t “anointing winners” to ensure that capacity remains here, just as with steel production. In general, companies don’t make business decisions based on national-security concerns. We shouldn’t sacrifice national security on the altar of free-market orthodoxy—“fostering a competitive market” by itself doesn’t guarantee that a company would remain in the U.S.

Edward Taussig
Brooklyn, N.Y.

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