May 08, 2006

The Big Merger trend continues

In today's Corpotate and Wall Street version of TREND FOLOWING - Wachovia buys Golden West Financial and Inco is chased . If Wachovia HAD to break into the West, did management not see this coming with all that banker help, before the recent boom. Higher prices = higher fee's. Lame and lame for the common shareholder's.

At the top of my 2006 predictions was the boom in mergers and the first half of 2006 has been a doozy. I await the hostile bid for Apple. I guess the bankers and CEO's want to make sure it is the right thing to do so they will wait until Apple has 10 percent of the PC market. Fine with me.

Why do we pay these boards and CEO's so much money to do such common things.

I really believe that for the market to be fair to the common shareholders, we need a salary cap in the fortune 500 space for executive compensation and we need it NOW!

I was checking out the returns of the merger arb funds this year and they are great. I would expect their returns to continue for the forseeable future in this easy money environment.

I actually expect the trend to accelerate as interest rate fears heat up and stock prices continue to rise.

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