PATIENCE SWEET PATIENCE

It takes patience to ride out a take-over play. Many a trader has "hit the bid" in regard to AMTD. When the stock first started it's most recent move we tripled-up. Since then we have held onto this bucking bronco and are enjoying a great ride.

This morning the reports indicate that AMTD will announce the purchase of TD Securities today. Hidden behind the announcement was the announcement that ET has raised its bid for AMTD to $17 per share.

For many months, I have written that investors should realize that companies are buying back stock, raising dividends or buying other companies. This activity will continue because companies are rich with cash. Cash is an under-performing asset. Any investor including mutual funds and corporations, who holds excess cash is going to kill his market performance 9 times out of 10. Those who think they can short-time the markets and hold cash when values of stocks, bonds and real estate are declining are badly mistaken.

Allocating substantial resources to cash is a sure way to lose in the long-run. Companies holding low debt and high cash positions are inviting take-over. The smart investor will buy stocks before the take-over bid is announced.

This is not written to suggest that one invest in take over rumor stocks. One should buy good values and the take overs will come.

CNBC just reported that the ET bid is $17.50.

BUY THE BULL! THE BULL IS GRAZING--GATHERING STRENGTH--THE NEXT RUN IS NEAR!