Wednesday, July 11, 2012

Even a broke watch is right twice a day....

This week Wellpoint announce they would be buying Amerigroup. By way of full disclosure, I used to work for Amerigroup. I bought the stock a while back and pretty much sat on my +100% return.  When the Wellpoint announcement came out this week my returns shot to over 200%.
Chart forAMERIGROUP Corporation (AGP)

I had no idea this was going to happen, and I may not be the smartest bulb on the shelf, but I ain't the dumbest either. I bought at $28.78, the price is now $89, Wellpoint offered $92. Sell, sell, sell.   The question becomes, am I selling too soon?  Here are the possible outcomes I see.
1. The acquisition goes through and the stock goes for $92. I lose about $4 a share.
2. The acquisition doesn't go through and the stock falls back to about where it was before, about $63. I lose about $28/share.
3. Amerigroup decides it doesn't want to be acquired. Not likely, I would imagine this has been discussed for weeks if not months.
4. Another suitor jumps in and offers a higher price. Possible, but I also think not very likely.

So, take the money and run. Yes, even a moron can make money in this market if they are lucky.

Read this article on Netflix. Thinking of buying some stock, but gonna keep an eye on them for now.

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