Sunday, May 31, 2020

May 2020 Performance

What a wacky market… It just feels weird that I am now up for the year after experiencing the declines in March. Do I feel the rise in the market is justified? Nope, but I’ll go for the ride for now. My cash position is ~15% and will probably rise.

There were no major changes in my portfolio other than trimming about half my position in Qiagen. I’m hanging on to my remaining position in anticipation of a bump in price. I have no intention of tendering my remaining shares at the current price of 39 euros from Thermo Fisher. I have a feeling that a good number of shareholders will also not tender at the current price.

I did play with some merger arbs such as SORL Autoparts, Mellanox Technologies and Stemline Therapeutics. SORL and Mellanox closed as expected. It took forever to receive the cash from the Mellanox deal, which negatively impacted the annualized rate of return. Mellanox is an Israel based company, so you need to submit documentation to show that you are a US resident to avoid the 25% withholding tax. Next time dump any Israel based company prior to closing to avoid this headache. Finally, I played Stemline via short Puts and recently closed out the position with a small gain. As of today, I have no merger arb positions.

As I’ve been saying for a while, I remain cautious with this market. Nothing is cheap right now. I’ll continue to play it “safe” with merger arb plays for the time being, but you have to be careful as many acquirors are motivated to walk from deals in this economic environment.

I guess that’s it. Stay safe…

2020 YTD Performance = +3.2% with the running monthly returns as follows:

January +2.7%
February -6.8%
March -9.9%
April +12.3%
May +6.6%


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