Many arbitrage strategies can generate exceptional returns. Some are explained by the academia and some not. Without much research on it, my gut feeling is that arbitrage opportunities can serve as real options which are expected to increase the future cash flow. Things can get clearer if we can predict the future cash flow , determine the probability of the success of the projects, and decide the rate of return. It is very interesting to take some time doing more research and some experiments. My practice in investing Chinese Stock Split is doing damn good. I am motivated to cover the following areas:
1. Stock split
2. Special dividend
3. Merger arbitrage
4. High growth
5. Value investing mispricing
6. Cyclical correction
7. Policy and government influence
8. Buyback
One of the blogs that I found interesting and valuable is http://www.sinletter.com/. Asif is a great guy and he offers some great stuff. I appreciate it a lot. I am very much motivated to start a platform like that focuses on Chinese and Hong Kong markets. Hope I can also find something that will work out.
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