RolfAndreassen, if you have a theory that allows you to predict particular inefficiencies in very liquid markets like stocks, then you could easily make huge amounts of money (PM me if you need help doing so). The fact that you haven't done so (if, in fact, you haven't) puts your particular hypothesis in a reference class of hypothesis that aren't even worth considering seriously.
Serious question: how would you take putative knowledge that IPO prices are sometimes set too high for the reasons Rolf gives (or even that stock prices in general are subject to anchoring bias or exhibit hysteresis) and use it to make huge amounts of money, particularly given a limited initial bankroll? I am clearly not an economist, so even a rough sketch would help me understand.
Facebook IPO'd at a price of 38 dollars a share, which apparently gave it a price-to-earnings ratio in the range of 100 - extremely, fantastically high. The price dropped pretty rapidly and is currently somewhere around 20 dollars; which still, presumably, gives it a very high P/E ratio somewhere in the forties. Now, suppose it had IPO'd at a more historically-reasonable P/E of, say, 20 - still high, but not stratospheric. That would put the initial share price somewhere around 10 or 12 dollars. Is there any strong reason to believe that the price would then have *risen* to where it is now? It is not obvious to me that the current price is supported by anything but the historical price - in other words, it's trading around 20 because it has recently traded around 25.
My point: I can't help but wonder if someone connected to the IPO had read Kahneman on anchoring. Somebody, clearly, was buying the stock at 33, just as someone is still buying at 20; I wonder if the chain of thought had that apparently-arbitrary number "38" in it somewhere, making 33 look cheap - fundamentals be damned! And if this happened, who benefited, and what ought we to conclude about the efficiency of markets?