How You Can Invest With The Best
Investing strategies come in many forms from betting on an industry to just looking for companies that have been downgraded by analysts.? This simple strategy focuses on the big players who get a seat on the board and pressure Executive Leadership to make changes that will enhance value for the shareholders.? You can see how your favorite investors are spending their money because when they buy more than 5% of a company they have to file form 13D for the SEC which then becomes public.
See how 13D investors are performing.
One way to?make money ?is to mimic Wall Street?s activists?investors who, in an effort to unlock a firm?s value, buy a big stake and then pressure top execs to take steps to boost the share price. By persuading the bosses, other shareholders?or both of the wisdom of their approach, activists can force a company to cut costs, split in two, unload a lagging unit or sell the entire business.
The strategy is not to buy when an activist buys more than 5% of a company (even though shares may rise as much as 6% in one day) but when the activist is offered a board seat.? This signals the commitment of the company to use the activist?s expertise.? The play right now is to buy Darden Restaurants because Jeff Smith, an activist and hedge fund guy, become Chairman a year ago. It usually takes five years for this strategy to work out.? Nothing ?good usually happens overnight in the market so patience is key.
Learn this effective strategy and how you can spot opportunities for investing.
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About Shaun Archer Tatum Shaun works in corporate finance in New York City. He has done financial consulting for several start-ups and has worked at several Fortune 500 companies. He has contributed several finance/investing articles on Seeking Alpha which have been published on Yahoo! Finance.