Merger Arbitrage

  • 25 May
    Building The Best Portfolio For The Upcoming Recession

    Building The Best Portfolio For The Upcoming Recession

    • Stocks will be hit badly. Low price earnings and high book values can provide some safety.
    • Bonds look much better than last year.
    • Alternative investments can be a jack-pot for your portfolio.

    Introduction

    Yesterday we discussed how a recession is imminent, especially if the trending down credit growth turns negative.

    The most important thing now for investors is to prepare for such an event. Today, we’re going to dig deeper into the recession-related investing risks as different asset classes will be affected differently. More →

  • 14 Mar
    The Market Is Overvalued – Look For Merger Arbitrage Opportunities

    The Market Is Overvalued – Look For Merger Arbitrage Opportunities

    • The arbitrage idea disclosed back in October has delivered 14% since then, but that isn’t the point.
    • The point is that merger arbitrage can deliver significant returns with less risk.
    • You can further improve your returns by not listening to the media, or even better, by listening but doing the opposite.

    Introduction

    There are essentially two low risk options to invest in in these expensive markets. It’s true that the S&P 500 can go higher in 2017 and 2018, but it’s what we don’t see coming that scares me at these valuations.

    The S&P 500 has a CAPE ratio of 29.14. This ratio has been higher only two times in history. You can read more about the CAPE ratio here. More →

  • 28 Oct
    Is Merger Arbitrage A Good Bet For The AT&T – Time Warner Deal?

    Is Merger Arbitrage A Good Bet For The AT&T – Time Warner Deal?

    • With merger arbitrage, the biggest risk is always that the deal may not go through.
    • The market is currently giving the AT&T – Time Warner deal a 40% chance of success.
    • We’ll share some merger arbitrage insights from Warren Buffett.

    Introduction

    The announcement of the AT&T (NYSE: T) acquisition of Time Warner (NYSE: TWX) in an $85 billion cash and stock deal, was the big topic on the market this week.

    This and other merger and acquisition deals offer the opportunity to make a buck on merger arbitrage. We’ll explain how merger arbitrage is done, what can be gained from it, and what the risks are. More →