Reuters - Video


Investing 201

Invest like an activist

Friday, Jul 26, 2013 - 02:49

Dan Loeb, Carl Icahn and you. Here are three ways to mimic the style - and hopefully the returns - of big-name activist shareholders.

▲ Hide Transcript

View Transcript

Just investor -- just hundreds of millions on this two year investment in Yahoo!. Carl Icahn has made billions off its hostile -- Now you can play the same game. Yeah a study by Harvard professor Robin Greenwood and student found. That investments in companies that got taken over as a result shareholder activism within eighteen months and that's filing. Big returns. Outperforming their peers -- roughly 25%. One waiting for the same game is to mimic their investments went low -- in the Yahoo! forth and so you when he felt himself. Ford -- on this high stakes game we just lost to Abdullah seen old -- well. He says can read things in mind one diversify. Don't put your eggs in one that you should pull together multiple managers at least cat right. And and that's. Based on their collective wisdom to protect yourself down side and it. For example you can allocate half of your activists portfolio to an inverse ETF like the pro -- -- S&P 500. That's down 17% this year or reverse them yes and he's 18% -- game three being disciplined. -- best for at least we rebalance your portfolio courtly and cast emotion aside. Selling the activist investor sells so should we make no direct judgment are so. Around whether we should be in or out of we've we've we've we've followed. Models that we build. Religiously. -- the guts for why consider these passive ways. Like bonds. Thirteen the activist fund is a pure play mutual fund that tracks the positions of roughly ten activist investors. It is up 23% this year and has gained 45% since its launch in 2011. Outstripping the S&P 500. Also out gunning ESPN. ETF that should dollar runs out of -- alternative health. It has 10% exposure to investments by activists. Alpha has risen nineteen point 5% this year and has returned 33%. Since its launch last year. If you really believe an icon you can invest in Ikon enterprise. As of last month the publicly traded master limited partnership owns stakes in the likes of Netflix Chesapeake energy and tell. We used duking it out with founder Michael -- for control of the computer company. -- Donald roll over the last ten years Icahn Enterprises has -- Warren Buffett's Berkshire Hathaway. Just me shaken stunning the company's rollercoaster rides and a master gunslinger -- -- --

Invest like an activist

Friday, Jul 26, 2013 - 02:49

Top News »

The Exchange »

Moving Pictures »