Dear Diary,
I just sold out the PHLY arbitrage for a 5% gain. This represents a 32.59% annualized gain over a 56 day holding period (9-30-08 thru 11-25-08). The expected closing price is $61.50 on December 1, 2008, so I went ahead a sold out at $61.21 a share today (6 days early) to get the cash ready for another deal today or tomorrow.
Gene
Tuesday, November 25, 2008
Saturday, November 22, 2008
CROX Hammered
Dear Diary,
CROX, my major position over the past many months, just took a $148 million hit on earnings this quarter. Net Quick Assets was listed at $0.41 per share before the earnings announcement, so I'll be buying more if the stock drops from its current $1.04 a share price to get my average purchase price down below the current $8.31 a share to something closer to the Net Quick Asset figure.
Johnson & Johnson (JNJ) is getting into buying range, with a p/e ratio of 12 now and a widening Net Profit Margin. All the "Holy Grail" situations I'm following just refuse to drop to a p/e ratio of 10, so I can buy them. This leaves me several buys into Net Quick Assets, as the vast majority of the stocks I follow have narrowing Net Profit Margins right now.
I read an economist who studies bear markets, and he believes the bottom of this one we're in is about 6,500 on the DOW Jones Industrial Average and should last another 15 months. I don't guess bottoms of markets, but bottoms of stock prices are supposed to be something in proximity to Net Quick Assets. What I own that doesn't go belly up should provide 300% to 1000% gains over the next few years and should make up for any losses.
Gene
CROX, my major position over the past many months, just took a $148 million hit on earnings this quarter. Net Quick Assets was listed at $0.41 per share before the earnings announcement, so I'll be buying more if the stock drops from its current $1.04 a share price to get my average purchase price down below the current $8.31 a share to something closer to the Net Quick Asset figure.
Johnson & Johnson (JNJ) is getting into buying range, with a p/e ratio of 12 now and a widening Net Profit Margin. All the "Holy Grail" situations I'm following just refuse to drop to a p/e ratio of 10, so I can buy them. This leaves me several buys into Net Quick Assets, as the vast majority of the stocks I follow have narrowing Net Profit Margins right now.
I read an economist who studies bear markets, and he believes the bottom of this one we're in is about 6,500 on the DOW Jones Industrial Average and should last another 15 months. I don't guess bottoms of markets, but bottoms of stock prices are supposed to be something in proximity to Net Quick Assets. What I own that doesn't go belly up should provide 300% to 1000% gains over the next few years and should make up for any losses.
Gene
Wednesday, November 19, 2008
BUD Deal Closes
Dear Diary,
The BUD arbitrage just closed at the stated sale price of $70 a share over a 33 day holding period, and represents a 17% actual gain before minimal expenses, or an annualized gain of 188.03%.
A dollar invested in DRS on 9-30-08 is now up 22.43%, a 190.39% annualized gain, based on the reinvestment into BUD back on 10-16-08 of that same dollar. All calculations do not include minimal brokerage fees.
With the proceeds of the BUD deal, I brought down my purchase price on the HUN deal to $8.78 a share, from the original purchase price on 8-26-08 of $13.52. This deal still has a real chance of getting done and is still stated to close at $28 a share.
Gene
The BUD arbitrage just closed at the stated sale price of $70 a share over a 33 day holding period, and represents a 17% actual gain before minimal expenses, or an annualized gain of 188.03%.
A dollar invested in DRS on 9-30-08 is now up 22.43%, a 190.39% annualized gain, based on the reinvestment into BUD back on 10-16-08 of that same dollar. All calculations do not include minimal brokerage fees.
With the proceeds of the BUD deal, I brought down my purchase price on the HUN deal to $8.78 a share, from the original purchase price on 8-26-08 of $13.52. This deal still has a real chance of getting done and is still stated to close at $28 a share.
Gene
Wednesday, November 12, 2008
Arbitrage # 7
Dear Diary,
I just picked up my 7th Cash on Sale Arbitrage. WINS is to be bought out for $6.25 a share in late 2008 to early 2009, a 13% gain over the purchase price of $5.52 a share, today.
I've noticed that the exact date of a proposed sale often does not turn out to be precise, so I'm doing this deal on more general information, concerning the closing date.
Gene
I just picked up my 7th Cash on Sale Arbitrage. WINS is to be bought out for $6.25 a share in late 2008 to early 2009, a 13% gain over the purchase price of $5.52 a share, today.
I've noticed that the exact date of a proposed sale often does not turn out to be precise, so I'm doing this deal on more general information, concerning the closing date.
Gene
Sunday, November 9, 2008
AHG
Dear Diary,
The AHG money showed up in my brokerage account 2 days after the stated closing date, just as expected.
HUN has seen the banks try to walk away from the deal they had to sell out for $28 per share, so a law suite is going forward against the banks by the buyer, Apollo Group (Hexon). Meanwhile, HUN is negotiating to try to get the closing price down to about $25.25 per share after the judge in the case ruled that the deal must go through as planned. I like the internal economics of HUN well enough to own it at $8 per share, like the "cigar butt" that Mr. Buffett often references. In a Graham styled "cigar butt" deal, you are simply buying a company so cheap that losing money becomes hard under any circumstances. I'm looking at book value here of $8.50 a share in "Value Line."
Gene
The AHG money showed up in my brokerage account 2 days after the stated closing date, just as expected.
HUN has seen the banks try to walk away from the deal they had to sell out for $28 per share, so a law suite is going forward against the banks by the buyer, Apollo Group (Hexon). Meanwhile, HUN is negotiating to try to get the closing price down to about $25.25 per share after the judge in the case ruled that the deal must go through as planned. I like the internal economics of HUN well enough to own it at $8 per share, like the "cigar butt" that Mr. Buffett often references. In a Graham styled "cigar butt" deal, you are simply buying a company so cheap that losing money becomes hard under any circumstances. I'm looking at book value here of $8.50 a share in "Value Line."
Gene
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