I also usually don’t get into a workout unless there is about 1 month left. I’ve only acted on 2 arbitrages to date and the holding period has been around 3-4 weeks for both.

If you come across some stuff, I’ll be very interested to learn about it.

I read parts of the 1988 Berkshire Hathaway letter to shareholders where Warren Buffett gives his four questions for investing in arbitrage:

To evaluate arbitrage situations you must answer four
questions: (1) How likely is it that the promised event will
indeed occur? (2) How long will your money be tied up? (3) What
chance is there that something still better will transpire – a
competing takeover bid, for example? and (4) What will happen if
the event does not take place because of anti-trust action,
financing glitches, etc.?

I myself was turned onto arbitrage ever since I saw BUD’s price creep up after the cash deal was announced. If I could make 1% per month with arbitrage I would be happy to diversify my returns.

Another one I recently came across is Tumbleweed (TMWD) which I will have to look into. It is a cash transaction which I prefer much more than share transactions.

I’m still trying to improve and smooth out my processes when it comes to arbitrage but it does help boost returns.

I also just ordered “You Can Be a Stock Market Genius” by Joel Greenblatt which deals with special situation techniques including arbitrage. Looking forward to reading it.

I thoroughly enjoyed your article on the JAZ arbitrage. I am looking into branching out by implementing other strategies for diversification purposes. Value arbitrage sounds like an interesting concept to me that could yield decent returns.

Best Regards,

Dividend Growth Investor