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
Wednesday, November 19, 2008
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
Tuesday, October 28, 2008
Buying at Net Quick Assets
Dear Diary,
I just bought shares of General Electric (GE) common at $18.7998, based on a Net Quick Asset calculation of $23.57 in my "Value Lines."
Jones Soda (JSDA) was just purchased for $0.81 per share with a Net Quick Asset calculation of $.76 per share.
Finally, Heely's Inc. (HLYS), a shoe company, was just purchased for $3.28 per share, based on a Net Quick Asset calculation of $3.76.
AHG is expected to closed today on its arbitrage sale for $21. It is currently trading for $20.99 a hour before the market close, but I want to save the commission and just let cash switch into my account for the stock naturally.
Gene
I just bought shares of General Electric (GE) common at $18.7998, based on a Net Quick Asset calculation of $23.57 in my "Value Lines."
Jones Soda (JSDA) was just purchased for $0.81 per share with a Net Quick Asset calculation of $.76 per share.
Finally, Heely's Inc. (HLYS), a shoe company, was just purchased for $3.28 per share, based on a Net Quick Asset calculation of $3.76.
AHG is expected to closed today on its arbitrage sale for $21. It is currently trading for $20.99 a hour before the market close, but I want to save the commission and just let cash switch into my account for the stock naturally.
Gene
Thursday, October 16, 2008
Arbitrage #5 and #6
Dear Diary,
In Arbitrage #5, I just bought shares of BUD for $59.89 per share with an expectation of a close on the Imbev deal by 12-31-08 for $70 a share, a 17% gain over 76 days, or an annualized gain of 81.64%.
I also picked up in Arbitrage #6 shares of ROH for $69.64 with a expectation of close by 1-1-09 for $78 a share, a 12% gain over a 77 day holding period, for an annualized gain of 56.88%.
Gene
In Arbitrage #5, I just bought shares of BUD for $59.89 per share with an expectation of a close on the Imbev deal by 12-31-08 for $70 a share, a 17% gain over 76 days, or an annualized gain of 81.64%.
I also picked up in Arbitrage #6 shares of ROH for $69.64 with a expectation of close by 1-1-09 for $78 a share, a 12% gain over a 77 day holding period, for an annualized gain of 56.88%.
Gene
Wednesday, October 15, 2008
Sold First Arbitrage
Dear Diary,
In probably the worst market conditions in the past 80 years, I sold DRS just now for $80.0305 per share, a gain of $3.5515 or a 4.64% gain over a 15 day holding period. This represents a 113.15% annualized gain.
Gene
In probably the worst market conditions in the past 80 years, I sold DRS just now for $80.0305 per share, a gain of $3.5515 or a 4.64% gain over a 15 day holding period. This represents a 113.15% annualized gain.
Gene
Tuesday, October 7, 2008
Market Jittery/ Buffett Buying
Dear Diary,
The market dropped 800 points at one point yesterday, and it closed under 10,000 for the first time in four years, say the talking heads.
Mr. Buffett made a $3 billion infusion into General Electric (GE) in the $22 per share range. This stock is in my universe of stocks I follow, and it clear that Buffett is buying in relationship to Net Quick Assets (Working Capital less Inventories and Medium Term Holdings on a Balance Sheet). This calculation is very close to Working Capital per share, so I generally make no distinction. GE shows $27.08 in Working Capital and about $23 in Net Quick Assets.
There are 6 companies selling in relationship to Working Capital in my tracking universe of stocks.
My Cash on Sale Arbitrage holds 4 positions, presently. AHG was due to close on 9-30-08 and HUN was due to close on October 2, but neither has done so to date. Expectations are still for a close.
That "Kiplinger's" article was a writer attempting to extrapolate Buffett's mind onto CROX back when it was trading say at $75 per share. It was too highly priced with a growth rate that could not have kept pace with the price. Today, CROX trades at less than Working Capital, so I'm buying when I have cash available.
A friend bought me a copy of, "The Snowball," Mr. Buffett's biography. The main thing we learn for our purposes is that arbitrage is a big part of his investment life.
Gene
The market dropped 800 points at one point yesterday, and it closed under 10,000 for the first time in four years, say the talking heads.
Mr. Buffett made a $3 billion infusion into General Electric (GE) in the $22 per share range. This stock is in my universe of stocks I follow, and it clear that Buffett is buying in relationship to Net Quick Assets (Working Capital less Inventories and Medium Term Holdings on a Balance Sheet). This calculation is very close to Working Capital per share, so I generally make no distinction. GE shows $27.08 in Working Capital and about $23 in Net Quick Assets.
There are 6 companies selling in relationship to Working Capital in my tracking universe of stocks.
My Cash on Sale Arbitrage holds 4 positions, presently. AHG was due to close on 9-30-08 and HUN was due to close on October 2, but neither has done so to date. Expectations are still for a close.
That "Kiplinger's" article was a writer attempting to extrapolate Buffett's mind onto CROX back when it was trading say at $75 per share. It was too highly priced with a growth rate that could not have kept pace with the price. Today, CROX trades at less than Working Capital, so I'm buying when I have cash available.
A friend bought me a copy of, "The Snowball," Mr. Buffett's biography. The main thing we learn for our purposes is that arbitrage is a big part of his investment life.
Gene
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