M&A Question

Discussion in 'Trading' started by mjt, Feb 20, 2002.

  1. nitro


    Boring? Maybe, but a great way to make money. At some prop firms (esp. at Bright) you will see a lot of people doing M&A (risk arbitrage) Warren Buffet has made a pretty penny on these as well!

    IMHO, if done with great discipline, it's the closest thing to "easy" money in the market.

    #11     Feb 20, 2002
  2. Like Senior Rigel's remarks about ''30%gap'' Interesting article today about TVLY,Solomon Smith Barney...............................See smartmoney.com-------------------------''One day wonder,You call that a travel deal?'' ! :cool: [Part of Dow Jones& Co]
    #12     Feb 20, 2002
  3. "Easy money" until the deal falls apart - ask the guys at Goldman, et al who've taken serious baths in the last couple of years unwinding positions on big M&As that failed to close at the last minute.

    When they work, it's "easy money" - when they don't, it can be expensive.
    #13     Feb 20, 2002
  4. TallPaul


    I agree with ArchAngel, for all who think its "easy money" go back and look at ORN on Feb 6 and tell me what you would have done when the deal widened more than two dollars in a single day. Not as "easy" as it appears.
    #14     Feb 20, 2002
  5. Wonder if the candlecharts,news reading will get more interesting if other bidders get in the battle for TRW ? {2}I remember Carl Ichan [inviting more bidders in on Nabisco Group Holdings over 100% rise in 2000] saying something like this to Maria, CNBC-------------I dont want to bid against myself !:cool: [Answering question if Ichan would bid higher]
    #15     Feb 22, 2002
  6. nitro


    Hence, as I mentioned, the importance of great discipline.

    I know seven figure traders that took a bath on the GE/HON merger. They simply refused to believe that it might not happen.

    Part of the problem in Risk Arb is that it is one of the times where you might add to a position when it goes against you. However, when the spread widens "too much" this may be a sign that the market is telling you something. In this case, fear should take over greed, IMHO.

    #16     Feb 22, 2002