valuechaser Posted May 20, 2014 Share Posted May 20, 2014 Before I get into my post, I must say discovering this Forum was one of the best things that has happened for my portfolio. There are some extremely knowledgable folks here and I'm hoping to get some input on a strategy that I've been thinking about. Just for some background, I'm relatively new to investing seriously. I managed a bit of my own money over the years but not very actively as my job took up most of time. I got more serious about it over the past year or so and have been non-stop reading since then to learn as much as possible. The value investing philosophy makes complete sense to me and for the most part I've stuck with Pabrai's recommendation to pick and choose my investments from investors that are several times smarter than me. As such, I've been going through 13Fs and looking for businesses I understand. This has worked out fairly well. Despite the success I've had so far, I've found very few opportunities in the recent months that I truly understand and which fit with some of the value criteria I have. In going through Buffet's partnership letters I discovered that he often invested a sizeable portion of his portfolio in merger/risk arb opportunities especially when the market was frothy. For some reason I never thought merger arb was compatible with value investing but reading Buffet's letters got me interested. Especially because I worked in M&A for a couple of years so I feel pretty comfortable with reading merger agreements and assessing the potential risks of a transaction. I was hoping to find out if people on the forum have had much experience with the strategy because I don't see many posts on the subject. Is it something you consider in a frothy market? Have you found the risk/reward profile of the strategy generally good. Any advice or reading materials you could recommend. Apologies for the long post and thanks in advance for any input you could provide. Link to comment Share on other sites More sharing options...
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