Welcome to Fantasy Island

Where palm trees sway, and IPOs <I>always</I> soar to the sky.
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Looking back on last week, I'd have to say that everything went according to a script out of Fantasy Island. Marimba (MRBA:Nasdaq), Razorfish (RAZF) , Mpath Interactive (MPTH:Nasdaq) and AppliedTheory (ATHY) all opened to standing-room-only crowds. Each delivered incredible performances, just like they were supposed to, just like the deals did last week and the week before that and the week before that. Sheeeese! When will it all end?

You could say that I've seen this movie before. Having witnessed many a hot IPO market cycle before, I have learned one very solid lesson: When things look like they will never end, they are about to.

I don't know how you feel about the endless parade of mind-blowing first-day premiums and instant wealth creation, but just the other day, I got a wake-up call reminding me just how unrealistic expectations have become.

Just moments after the AppliedTheory IPO opened up more than 8 points, I took a call from a reporter from one of the national newswires. She asked me -- and I'm not making this up -- if I saw this deal as a

disappointment

. A disappointment? I was speechless. I excused myself and went to get a cup of java, wondering if

I

was the crazy one.

So what's my point? Only this: This is not the way it usually is. This

will

end someday, and when it does, an 8-point premium will look pretty darned good! My advice? Trade like it could all end tomorrow, because it just might.

The Week Ahead

In spite of this Chicken Little sermon, I'm actually pretty excited about the calendar this week. There are a number of deals that deserve to be bought and held, but I suspect that the first-day premiums will coerce investors to take profits right away. Read on and see if you can spot my favorites.

Ben Holmes is the founder of ipoPros.com, a Boulder, Colo.-based research boutique specializing in the analysis of equity syndicate offerings. This column is not meant as investment advice; it is instead meant to provide insight into the methods of new and secondary offerings. Neither Holmes nor his firm has entered indications of interest in any of the companies discussed in this column. Under no circumstances does the information in this column represent a recommendation to buy or sell stocks. Holmes appreciates your feedback at

bholmes@ipopros.com.