Dear Reader,
Good morning.
This is Dylan Jovine with Behind the Markets.
Happy Thursday.
Today is Thursday, March 5th.
What a blessing it is to be alive.
Today I want to talk about the IPO market — because it's one of the most interesting places investors can look for signals about the health of the broader market.
When I was in my twenties, I went through a phase where I was reading everything written by Benjamin Graham, Warren Buffett's mentor.
Books like Security Analysis and The Intelligent Investor.
And there was one line that always stuck with me.
Graham said you can often spot the end of a bull market by the quality of companies going public.
When markets get overheated and investor demand becomes insatiable, investment banks will start pushing out lower-quality deals just to satisfy the public's appetite.
We saw it during the Dot-Com era.
At the end of that boom, companies with questionable business models — think Pets.com and dozens of others — were suddenly rushing to go public.
Banks didn't really care about the quality.
They cared about collecting fees.
So the IPO market has always served as a kind of finger on the pulse of the capital markets.
It tells you something about the health of the patient.
And coming into this year, the IPO market actually looked very healthy.
There were a lot of companies waiting in line — almost like airplanes sitting on the runway — ready to take off.
Many of them are high-quality companies that have been preparing to go public for quite some time.
That's generally a very positive sign.
It suggests the capital markets are still functioning well.
It doesn't mean the patient doesn't have problems somewhere else in the body — but at least the pulse and blood pressure look stable.
Now here's where things get interesting.
The recent conflict with Iran has started to disrupt that IPO runway.
Some companies are delaying their IPO plans.
Bloomberg recently reported that SoftBank's PayPay IPO, which many investors consider a high-quality offering, may be pushed back.
At the same time, other companies are doing the opposite.
They're rushing to market — trying to complete their IPO before volatility potentially gets worse.
So you're seeing two different reactions.
Some companies are saying:
Let's wait.
Others are saying:
Let's get this deal done right now before the window closes.
Generally speaking, companies that delay tend to be companies that have strong balance sheets — plenty of cash or solid cash flow.
They have the luxury of waiting.
Companies that rush often worry the IPO window might close.
And the reason the markets are nervous right now is obvious.
When President Trump said he would do "whatever it takes" and added that wars can be fought "forever and very successfully," that rattled investors.
You can see it directly in the market's reaction to oil prices.
When oil spiked toward $80 a barrel amid fears the Strait of Hormuz could be disrupted, the market dropped sharply.
At one point the Dow was down more than 1,000 points.
Then the administration clarified that the U.S. Navy would ensure shipping lanes remained open and would even escort vessels if necessary.
Oil pulled back.
And the market recovered.
This is also why we've been highlighting gold so much recently as well.
This is exactly the kind of environment where gold historically starts to move.
Wars, oil shocks, and geopolitical instability tend to drive capital toward hard assets.
And right now something very unusual is happening behind the scenes in the gold market that most investors haven't noticed yet.
Read more about it here>>>
So right now we're seeing a lot of headline-driven volatility.
But it's important to keep some perspective.
Markets naturally experience 5% to 15% corrections once or twice a year anyway.
In many ways, these pullbacks are healthy.
I sometimes describe them as "taking the head off the beer."
They remove some of the froth.
They force valuations to reconnect with reality.
Markets have to earn their narratives.
Now as for the geopolitical situation itself, the early assessment from a military perspective is that Iran has been significantly weakened as a traditional state power.
But that doesn't mean the risks disappear.
Iran still has the ability to cause trouble through asymmetric tactics.
We could see disruptions to shipping.
We could see attacks in unexpected places.
There may be more shocks ahead.
That's simply the nature of conflicts like this.
The key for investors is not to panic and trade every headline.
When you pull the camera back and look at the long history of financial markets going back to the early 1900s, events like this often end up looking like short-term blips on a much longer timeline.
That doesn't mean the human cost isn't real.
War is a terrible thing.
Young soldiers on battlefields, civilians caught in the middle — it's always tragic.
And I try to remember that.
A friend once reminded me of this when I was discussing conflicts purely from a historical perspective.
She said, "You're talking about warfare like a historian."
And she was right.
Sometimes when you analyze these events intellectually, it's easy to forget the human side of it.
So I never want to minimize that reality.
But from a market perspective, the lesson is simple.
Pull the camera back.
Don't day-trade the panic.
Maintain a longer historical view.
In the grand arc of American financial history, events like this tend to matter less for the immediate volatility… and more for the longer-term geopolitical shifts that follow.
And tomorrow I'll talk about exactly why this conflict could become historically significant — but not for the reasons most people think.
Have a great day.
I'll see you tomorrow.
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