Musings on Investing

How to Make Your Cash Work

Allergan, etc.

For the last ten years, I have been organizing a very successful philosophy seminar in Vancouver, Capitalism & Morality. The next event will be on Saturday, August 3, 2019. Among the speakers are Jeff Deist, president of Mises Institute; John Hunt, author and entrepreneur; Adrian Day, a very successful fund manager; Albert Lu, CEO of Sprott Media USA; Rick Rule, CEO, Sprott USA Holdings, a well-known fund manager in natural resources; Doug Casey, author and philosopher; Fergus Hodgson, a prolific writer on Latin America issues, and many more.

If you would like to attend, please use the registration tab at the bottom of the page linked to the following image. Also, use discount code Jay18, for a 10% discount:

On investments…

Any rational investor keeps a part of his net-worth in cash. I have a moral problem keeping fiat currency with me, which is nothing but a loan to the federal banks at a negative real interest rate. Unless you are a billionaire, this cash can work for you. I like to keep some of such cash in big companies, which are very liquid and where I see a clear upside.

  • Allergan (AGN.NYSE; US$160.50) is being acquired. It is a US$52 billion company. Each share will convert to US$120.30 in cash and 0.866 shares of AbbVie (ABBV; US$66.62), a US$98 billion company. There is an 11% arbitrage upside, and the merger might close within the next two months, offering a fabulous annualized return.
  • Mellanox Technologies (MLNX; US$112), is also being acquired. It is a US$6 billion company. Each share will convert to US$125. The arbitrage upside is, again, 11%, but the deal will likely close by early next year. So, the annualized return is much lower than what AGN offers.

Warm regards,

Jayant Bhandari

Associate: Rajni Bala

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