Thank Take Over Rumours

As I mentioned before my wife and I were planning on selling off and closing our investment accounts to move that cash over to a TFSA.  As part of that we started looking at our stock holdings and were trying to determine when should we do this.  As some of our positions may result in loses if we sold.  A prime example of this was Manitoba Telecom (MBT).

The company had been picked out by my wife a while back since at the time it had a high yield and not too bad of a balance sheet.  Yet we also discussed the idea that it was perhaps too small of a regional player and perhaps we should move into a more national one (Rogers or Bell for example).  Yet when we started this talk we would have lost a bit of my wife’s initial investment, not huge perhaps a few hundred dollars.

Then MBT announced they sold their Allstream division, which while this was good and boosted the share price (from about $32 a share to $34 a share), the stock really went up after this article was published over at the Financial Post: Who is the Most logical buyer for MBT? That sent the share price up another $2 share to around $36.  So my wife’s position when from a lose to a little profit in a week…partly due to just rumour. Ah, I love the irrationality of the stock market at times. 😉

So thank you rumour mill…while yes we could potential do better on a buy out (if that occurs), the reality is it is never a good idea to get too greedy.  We got my wife’s investment back out which was the main objective (plus of course that nice stream of dividends over the last few years).

Have you ever had some dumb luck on the irrational nature of the stock market?  What’s your best gain?

4 thoughts on “Thank Take Over Rumours”

  1. While maxing out any room in your TFSA, not sure why you’d close your investment account? You’ll probably want to use it or a non-registered account once you’ve hit your TFSA limit. (Unless that’s for years and years to come.)

    I’ve given my irrational nature the boot in the past 2 years and switched everything over to Couch Potato index investing. I’m much happier. No “dumb luck” required anymore. 🙂

  2. @Jane,

    Ah yes…I’ve had many similar stories of the losing and in some cases going out of business. You win some and lose on others.

    Tim

  3. @Edward,

    We are getting rid of the taxable accounts since it will be at least two years until we burn through our RRSP and TFSA contribution room. Also after that I plan to switch brokage firms anyway, so it works out fine for us to close the old taxable accounts (the fees are horrible).

    I understand the appeal fo couch potato…I use it for our RRSP accounts. Way eaiser than picking stocks so depending on your time/level of interest it can be very helpful.

    Tim

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