Madoff's preferred investments


	Madoff's preferred investments

alexpapa

1-20-2009 4:48 AM

193 views

alexpapa says:

The name Madoff is now indelebly associated to the largest financial scam of history. Nevertheless, it's interesting to see what types of investments had Madoff's favors and that's what a columnist of the FT did. Fairly interesting piece.

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<div style="margin: 12px 0px; font-family: arial; color: #333333; background: #ffffff; border: solid 4px #e5e5e5; width: 100%; clear: left;"><div class="CM_CTB_Content_Wrap" style="margin: 0px; padding: 0px;background-color: #ffffff;"><div style="border-bottom: solid 1px #dcdcdc; white-space: nowrap; margin-bottom: 8px; background-color: #eeeeee ;background-image: url(http://clipmarks.com/images/source-bg.gif); background-repeat: repeat-x; height: 24px; line-height: 24px; vertical-align: middle; padding-bottom: 4px; color: #666666; font-size: 10px;" ><a href="http://clipmarks.com/clip-to-blog/" title="see clips that are hot right now"><img src="http://content.clipmarks.com/blog_embed/583d66ca-794b-4849-86e4-d25f6cedfe45/EEB24F86-BF57-4E9C-97A8-1961356DD09F/" alt="" width="19" height="19" border="0" style="vertical-align: middle; margin: 0px 4px; display: inline; border: none; float:none;" /></a>clipped from <a title="http://www.ft.com/cms/s/0/ba878230-e681-11dd-8e4f-0000779fd2ac.html" href="http://www.ft.com/cms/s/0/ba878230-e681-11dd-8e4f-0000779fd2ac.html" style="font-size: 11px;">www.ft.com</a></div><blockquote style="text-align: left; padding: 0px 8px; margin: 4px 0px 8px 0px; background: transparent; border: none;" cite="http://www.ft.com/cms/s/0/ba878230-e681-11dd-8e4f-0000779fd2ac.html"><P>It looks like Mr Madoff (or whoever chose the stocks in his fund) liked to get involved in various special arbitrage situations. Some of these still exist and make for interesting stock picks.</P></blockquote><div style="height: 2px; font-size: 2px; background: #dcdcdc; border-bottom: solid 1px #f5f5f5; margin: 2px 4px;"></div><blockquote style="text-align: left; padding: 0px 8px; margin: 4px 0px 8px 0px; background: transparent; border: none;" cite="http://www.ft.com/cms/s/0/ba878230-e681-11dd-8e4f-0000779fd2ac.html">Mr Madoff played a lot of special-purpose acquisition company arbitrage: SPACs trading below cash.</blockquote><div style="height: 2px; font-size: 2px; background: #dcdcdc; border-bottom: solid 1px #f5f5f5; margin: 2px 4px;"></div><blockquote style="text-align: left; padding: 0px 8px; margin: 4px 0px 8px 0px; background: transparent; border: none;" cite="http://www.ft.com/cms/s/0/ba878230-e681-11dd-8e4f-0000779fd2ac.html">Hicks has $540m in cash and a market capitalisation of $480m. Trading below cash makes this a very safe play.</blockquote><div style="height: 2px; font-size: 2px; background: #dcdcdc; border-bottom: solid 1px #f5f5f5; margin: 2px 4px;"></div><blockquote style="text-align: left; padding: 0px 8px; margin: 4px 0px 8px 0px; background: transparent; border: none;" cite="http://www.ft.com/cms/s/0/ba878230-e681-11dd-8e4f-0000779fd2ac.html">
<B><A href="http://markets.ft.com/tearsheets/performance.asp?s=be:ABI" symbol="be:ABI">Anheuser-Busch</A></B>, which has since been acquired. When Mr Madoff bought the stock he had a potential 40 per cent annualised return implicit in it because of the arbitrage going on with Anheuser-Busch being acquired by InBev. The deal closed in November so Mr Madoff made his money.</blockquote><div style="height: 2px; font-size: 2px; background: #dcdcdc; border-bottom: solid 1px #f5f5f5; margin: 2px 4px;"></div><blockquote style="text-align: left; padding: 0px 8px; margin: 4px 0px 8px 0px; background: transparent; border: none;" cite="http://www.ft.com/cms/s/0/ba878230-e681-11dd-8e4f-0000779fd2ac.html">Mr Madoff also liked “closed end fund arbitrage”: buying closed end funds trading at significant discounts to their net asset value</blockquote><div style="height: 2px; font-size: 2px; background: #dcdcdc; border-bottom: solid 1px #f5f5f5; margin: 2px 4px;"></div><blockquote style="text-align: left; padding: 0px 8px; margin: 4px 0px 8px 0px; background: transparent; border: none;" cite="http://www.ft.com/cms/s/0/ba878230-e681-11dd-8e4f-0000779fd2ac.html"><P>Finally, Mr Madoff was a big believer in financial media. One of his new positions in the third quarter of 2008 was a little stock called <A href="http://www.thestreet.com/" target="_blank" class="bodystrong">thestreet.com</A>, founded by CNBC’s Jim Cramer.</P></blockquote></div><div style="margin: 0px 6px 6px 4px;"><table style="font-size: 11px;border-spacing: 0px;padding: 0px;" cellpadding="0" cellspacing="0" width="100%"><tr><td style="background:transparent;border-width:0px;padding:0px;">&nbsp;</td><td align="right" style="background:transparent;border-width:0px;padding:0px;width:107px" width="107"><a href="http://clipmarks.com/share/EEB24F86-BF57-4E9C-97A8-1961356DD09F/blog/" title="blog or email this clip"><img src="http://content8.clipmarks.com/images/c2b-foot.png" border="0" alt="blog it" width="107" height="17" style="border-width:0px;padding:0px;margin:0px;" /></a></td></tr></table></div></div>

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