In 1989, Microsoft was a small company whose stock sold for $6 a share. That same stock has since split eight times. In 1991, Cisco stock was just $3 a share, which was eight splits ago. These companies used their investors' money wisely and grew into major powerhouses in the world economy. Sharon's Notes The entry requirements of the major stock markets in the United States have made the IPO a difficult process for most businesses. As described in the Ernst & Young Guide to Taking Your Company Public, The New York Stock The Ultimate Investor 429 Exchange requires a company to have net tangible assets of $18 million and pre-tax income of $2,500,000. The American Stock Exchange requires a stockholders' equity of $4 million and a market value of the IPO to be a mini- mum of $3 million. And the NASDAQ National Market re- quires net tangible assets of at least $4 million and a market value of the IPO to be a minimum of $3 million. In addition, it has been estimated that the IPO process can cost $400,000 to $500,000 for one of these major ex- changes. These costs include the registration fees as well as the fees paid to legal counsel, accountants and under- writers. Many small to medium companies that cannot meet these qualifications look for "reverse merger" opportunities, which allow them to merge with an existing public com- " pany. Through that process, the company can become a publicly traded company by taking control of the newly combined public company. Companies may also look to other foreign exchanges, like the Canadian exchange, where the entry requirements are not as severe. Who Buys Canadian? During one of my talks on investing in Australia two years ago, a member of the audience questioned my sanity at in- vesting in precious metals and oil. He asked, "If everyone else is in high-tech and Internet stocks, why are you working on the dogs of the economy?" I explained that it is always less expensive to be a contrar- ian investor, which is an investor who seeks out-of-favor or out-of-cycle stocks. 'A few years ago," I said, "when everyone was into gold, silver, and oil, the prices of the exploration 430 Rich Dad's Guide to Investing leases that make up these startups were very high. It was very difficult to find a deal at a good price. Now that the prices of oil, gold, and silver are down, finding good properties is easy and people are more willing to negotiate because these com- modities are out of favor." The price of oil has begun to rise, making the shares in our oil company much more valuable. Also, during this period, Buffet announced that he was taking a sizeable position in sil- ver. In February 1998, the billionaire investor disclosed that he had acquired 130 million ounces of silver and stored it in a warehouse in London. On September 30, 1999, Canadian Business ran an article indicating that the world's richest man, Gates, had made a buy in silver, acquiring a 10.