Sunday, February 03, 2019

January 2019 Performance

January started out as a bust for me, but for some reason or another came back nicely to finish off the month. The month started with the Apple earnings warning, which was the shot heard around the world. Then a few days later, Constellation Brands reported disappointing earnings and guidance, which sank the stock. I have decent positions in both of these stocks so I definitely felt the pain. I actually added to the Constellation Brands position during the selloff. Sometimes, it’s best to buy when you feel sick to your stomach. In any case, both Apple and Constellation Brands ended up nicely for January. All my other long positions (Alibaba, Mastercard, Qiagen and Visa) performed well in January. Sanofi was the only negative performer.

I’m currently involved in two arb plays: Tesaro and Loxo Oncology. Tesaro was acquired by GlaxoSmithKline for $75 per share in cash. I played this via long stock and short puts. Tesaro recently closed and the short put options were accelerated to February expiration. I also played Loxo Oncology, which is being acquired by Eli Lilly for $135 per share in cash via short puts and this is moving smoothly toward a mid-February close. I was fairly aggressive in both of these merger plays because they were both structured as tender offers and did not anticipate any antitrust issues, which equates to a fast closing.

I have to learn to just sit tight and wait for the right opportunities to show up. Last year, I found myself forcing some bad trades because I felt I had to be in the market.This game is a constant learning experience...


2019 Performance = +7.4% with the running monthly returns as follows:

January +7.4%

4 Comments:

At February 04, 2019, Anonymous Anonymous said...

What are your thoughts on RHT - looks like this will close.

 
At February 04, 2019, Blogger Money Turtle said...

I do see RHT closing, but it'll be a long wait. They are guiding for the second half of 2019 to close this deal. I may get involved as we get closer to closing, but not now.

 
At February 16, 2019, Anonymous Anonymous said...

I was following you all the past 2 years. I usually invest aggressively with 100% in 1 stock I did great results, around 120-130% since 2011-2017 unfortunately the MGI drop due to fxxckin trump destroyed my trend and I lost 40-45% in one bad trade.
don't worry, but many times I have seen you yes too much involved with very doubt companies, and in some too much keeping private how good was to know that it were more safe tender offers y Bla Bla
I think would be better a collaboration in a small chat with 5-10 of us to filter ourself and select better opportunities and calm down who is going to be, may be, wrong. however I appreciated your talent but I feel your job is underestimated in a blog like this, should deserve more. how to contact you via email?

 
At February 17, 2019, Blogger Money Turtle said...

We've all had blow ups so I know how it feels. The merger arb game is definitely more challenging now with the increased regulatory scrutiny from agencies such as CFIUS. I do think it's a good idea to bounce ideas with one another.


You can always contact me: moneyturtle (at) gmail.com

 

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