Earn 6% in the next 5 months (merger arbitrage)
 

CKFR is currently trading at a 6 - 6.5% discount over its purchase price of $48 per share from Fiserv.

I feel I can earn more than 6.5% elsewhere in the mean time, so I won't be buying any CKFR, but for those who are looking to be more conversative with their money, this deal will provide you with a little over a 6% return by EOY. If you could keep finding deals identical to this one, the annual rate of return would be around 14.5%. Not too bad for so little risk.

Re: Earn 6% in the next 5 months (merger arbitrage)
 

obviously there is some fear priced in that the deal wont go through. I dont know specifics but there is no free lunch on something this big and on info this readily available.

Re: Earn 6% in the next 5 months (merger arbitrage)
 

Shoe,

People who do this (merger arbitrage) have much more experience than you do and frankly just know what they're doing. When an impending merger is going to happen at a specified price, the discount you receive is nearly always the exact amount of uncertainty of the deal going through. There is no such thing as a free lunch, especially when a single variable controls the majority of the stock price (probability of deal going through).

Re: Earn 6% in the next 5 months (merger arbitrage)
 

I've taken a 50% loss in a merger arb before when the deal didn't happen. The selling company then filed for bankruptcy. Nice lesson for me.

Re: Earn 6% in the next 5 months (merger arbitrage)
 

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Not too bad for so little risk.

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lol

Re: Earn 6% in the next 5 months (merger arbitrage)
 

Seriously, Shoe has deserved a custom title by now. Something like BFI Court Jester would be perfect. This dude is like the reincarnation of Warren Buffett or something.

-Brendan

Re: Earn 6% in the next 5 months (merger arbitrage)
 

[ QUOTE ]
Seriously, Shoe has deserved a custom title by now. Something like BFI Court Jester would be perfect. This dude is like Warren Buffett's retarded brother or something.

-Brendan

[/ QUOTE ]

Re: Earn 6% in the next 5 months (merger arbitrage)
 

I just love how Shoe is giving this recommendation but passing on it b/c he is sure he can do better than 6% in 5 months. How he still is convinced that with no prior investing experience he can beat the market without luck is amazing to me. I have overall beaten the market over a 4 year period, but over that time, half of my money was in index funds and the many losses I had in individual investments were outweighed by a few good (probably just lucky) picks. When you put 10% of your portfolio in AAPL at $36, it helps a ton.

I believe Shoe will never beat the market over an extended period unless Nintendo or some other stock that he heavily invests in goes on a multiyear run. So if he ran a "mutual fund" with a couple of 100 stocks instead of 25% in Nintendo or something he would never be able to.

Re: Earn 6% in the next 5 months (merger arbitrage)
 

This one is as close to a done deal as you can get (in my opinion of course). I agree I am not a merger expert but am very familiar with both of these companies.

Re: Earn 6% in the next 5 months (merger arbitrage)
 

Owning 100 stocks is not necasarily a good thing. If I ran a mutual fund I wouldn't add more stocks just to have more.