05/17/13
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Moving On Up: America’s Freight Railways

On April 15th China announced that its economic growth had slowed unexpectedly in the first three months of 2013. Following the news, a sell-off of commodities occurred during which time crude oil fell below $88 a barrel and gold experienced its largest single one-day drop in 30 years. The next day, the International Monetary Fund…

05/17/13
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“Cautiously Optimistic” About Stocks

Barron’s recently published its survey of the top 100 financial advisors in the United States (they’re ranked by assets, and sadly ArbitrOption was not yet in a position to make the list).  It can be educational to review the findings and see what professionals who monitor the markets believe to be the greatest available opportunity…

05/17/13
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Outlook: Event-Driven Investing’s Prospects for 2013

As reported by the New York Times earlier this month, “Only 8,115 deals were announced worldwide in the first quarter of this year, the lowest number since 2003”. This trend could be a source of concern for those who earn their livelihoods from corporate change, such as acquisitions, mergers, special dividends, and corporate reorganizations. After…

05/17/13
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Why ArbitrOption Is Buying Dell

Just last month, this newsletter discussed the rumors of a leveraged buyout of Dell, and ArbitrOption’s refusal to get involved before the Dell Board of Directors disclosed the acquisition.  On February 5th, the company announced that it had agreed to be acquired by a consortium of buyers for $13.65 per share. There are several obstacles…

05/17/13
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Americans Have Too Much Wealth Tied Up in their Home

In a recent article, Bloomberg Businessweek highlighted the continuing reliance of most Americans on their homes as a savings plan.  This trend is alarming, and emphasizes why it’s important to include ArbitrOption in your savings portfolio. According to the article, the median American household lost 47% of its wealth from 2007 to 2010. Average wealth,…

05/17/13
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Followup: Wolverine’s Acquisition of Collective Brands Provides a Good Example of ArbitrOption’s Strategy

The June, 2012 newsletter featured a discussion of Wolverine Worldwide’s buyout of Collective Brands, a company best known for its Payless shoe stores. It’s sometimes helpful to provide a retrospective on ArbitrOption’s investments, to see if the opportunity panned out as expected. The original article from June can be seen by clicking here.  ArbitrOption’s Prediction…

05/17/13
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Rumortrage: Why ArbitrOption Won’t Buy Dell

The rumors of a leveraged buyout of Dell have been making the rounds, but ArbitrOption won’t touch it until certain criteria have been satisfied.  We have a process for evaluating investment opportunities, and one of those is that the Board of Directors of a company involved in a corporate event must publicly disclose that the…

05/17/13
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Stalemate: More of the Same to Come

In November’s newsletter, I mentioned the pending fiscal cliff and the implications for our economy. Last Wednesday, the CFA Society of Washington gave a presentation on the political implications of the election of 2012.  Unfortunately, they do not inspire confidence. The 2010 census results led to redistricting, which in turn created opportunities to gerrymander and restructure…

05/16/13
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Penn National Gaming’s Reorganization and Conversion to a Real Estate Investment Trust Provides a Good Example of an Event-Driven Investment Opportunity

Penn National Gaming (PENN) is one of the companies that ArbitrOption added to its watch list this month.  The firm owns and manages gaming properties. On November 16th, Penn National Gaming announced it would separate its gaming assets and property assets into two companies, one of which will be a real estate investment trust (REIT).  On…