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Strategies & Market Trends : Value Investing

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To: Freedom Fighter who wrote (6025)	2/12/1999 8:57:00 AM
From: Mike 2.0	Read Replies (2) of 78530

Re: Arbitrage opportunities.... You are quite right, for comparative purposes the return on such an arbitrage deal must be annualized. I haven't looked at Sbarro deal personally but on the face of it, looks like you landed a nice merger arbitrage transaction. Also such opportunities are an excellent market diversification tool. The only thing that is going to make Sbarro's price move will be a change in the terms of the deal or (hopefully not) the deal is cancelled. So Sbarro has a market beta of zero. This reminds me of a mutual fund which does this arbitrage stuff exclusively: Merger Fund. Last I heard it was closed to new investors but after reading your post I will revisit it. Thanks Wayne! BTW here is another arbitrage opportunity worth discussing here: has anyone looked into buying closed end funds which are trading at a discount to NAV, where the CEF is facing pressure from shareholders to go open end? Of course the fund then trades at 100% of NAV and investors pocket the old closed-end discount.

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