1 Big Mistake Investors Keep Making
The following video is part of our "Motley Fool Conversations" series, in which consumer-goods editor/analyst Austin Smith and industrials editor/analyst Brendan Byrnes discuss topics around the investing world.
In today's edition, Austin and Brendan talk about a huge mistake investors keep making: chasing the buyout story. While it can be tempting to jump in on a stock when you see it popping 15% or more on buyout news, and potentially even more as companies pay a premium over market prices to own one company or another, stay away. The finance graveyard is littered with smashed portfolios that bought the rumors, only to never have them materialize. RadioShack and Akamai are two notable "could be buyout-candidate" stories that never materialized, and more recently Talbots and Avon tested investors' nerves when their suitors didn't quite work out.
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At the time this article was published Austin SmithandBrendan Byrneshave no positions in the stocks mentioned above. The Motley Fool owns shares of Google and RadioShack.Motley Fool newsletter services recommendGoogle. Try any of our Foolish newsletter servicesfree for 30 days. We Fools don't all hold the same opinions, but we all believe thatconsidering a diverse range of insightsmakes us better investors. The Motley Fool has adisclosure policy.