GREY:LSTMF - Post by User
Comment by
naeden99on Jan 27, 2012 2:30pm
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Post# 19458565
RE: RE: RE: Interesting trading strategy using thi
RE: RE: RE: Interesting trading strategy using thi Yes, I've lost money on that trade so far (disregarding the tax loss benefit). However, just because something happened in the past doesn't make it continue, in fact, in this case, it makes it more likely to reverse.
The most quoted example of this kind of securities mispricing is the 3Com / Palm trade when the value of 3Com's ownership stake in Palm was bid up to be worth more than the value of its parent.
See this article (Can Markets Add and Subtract?):
https://www.chicagobooth.edu/capideas/win02/market.html