Mirror My Trades in the New Workouts Model Portfolio

Fat Pitch Financials in partnership with Covestor is proud to announce the new Fat Pitch Financials Workouts investment model. You now have the option of opening a mirroring account that will follow the trades of my new Workouts portfolio.

Workouts Model Summary

This unique model invests in workouts. Workouts are special situations where a corporate event sets the future value of a security. Such events include mergers, tender offers, going private transactions, liquidations, and the like. This model will take advantage of these arbitrage opportunities without using margin or short positions. The Workouts Portfolio will build upon the success of the Special Situations Real Money Portfolio.

Research

Workout opportunities are often difficult to find and track. Fat Pitch Financials searches securities filings and financial media reports daily for corporate events that may lead to investment opportunities. Those workout opportunities are then recorded and tracked in Fat Pitch Financials Contributors Corner database. Those special situations are then examined for risk factors and potential investment value.

Allocation Discipline

The Workouts model will typically hold between 5 and 15 positions depending on the number of workouts currently available. To some degree positions will be weighted by their risk adjusted probable return.

Sell Discipline

Most positions will be closed when a workout is completed and cash is paid out to shareholders. On occasion, a position will be sold before the completion of the workout if the market price approaches the workout value and a better opportunity exists. Positions will also be sold if the corporate event generating the special situation is canceled or drastically modified.

Exceptions

Depending on market conditions this model also may invest in deeply discounted stocks that are trading below their estimated liquidation value on the assumption that either the stock’s price will recover or a corporate action will be taken, such as a liquidation to return value to shareholders. The model may also occasionally exploit value opportunities that result from stock price declines following the canceling of a merger deal or other such event.

The Workouts model will differ a bit from the Special Situations Real Money Portfolio. Trading will be restricted in the following ways to allow for mirroring accounts:

  • Market capitalization must be greater than $50 million
  • Average daily trading volume must be greater than 10,000 shares
  • Minimum time between counter trade (i.e. buy/sell) in same security 15 minutes
  • No additional deposits will be added

Subscribe to the Workouts Model

Please share news of the new Fat Pitch Financials Workouts investment model with friends, family and colleagues that may be interested in a more passive way to invest in special situations. You can follow the Workouts model for free to get a weekly summary of the latest trades and performance.

For a limited time, Fat Pitch Financials will throw in a free one year subscription to our Contributor’s Corner special situations research service and investment community to new model subscribers. To subscribe to the Workouts model at Covestor, there is a $5,000 minimum and the fee is 1.50% of assets. Just contact me with proof of your new subscription to an account mirroring the Workouts model, and I’ll set you up for a one year free subscription to Fat Pitch Financials Contributors Corner.

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