Thursday, September 18, 2008

Closing MER

I sold all my MER shares for $27.05 about an hour into the trading day.

I bought this stake on the premise that the firm was undervalued on Aug. 1. I still think it is, but that just means Bank of America got a good deal, not that a better offer is possible.

I paid $26.85. As Merrill began to slide last week it dipped my "floor" price, and I doubled down at $19.43. Over the weekend, when everyone -- including me -- expected, BAC to make a run for Lehman, it instead bought Merrill for $29 a share in an all-stock deal worth $50 billion.

BAC subsequently took a little hit, so MER's shares didn't rise to the merger price, as is typical in cash deals. The stock has since seen extreme volatility.

I may well have sold too early, but trying to buy every bottom and sell every top is a fool's errand. Sometimes brass means having the presence of mind to walk away with a profit.

And I did, ahem, make +16.9% in 49 days, and that ain't bad.

1 comment:

The Godfather said...

That's good investing. Bravo!