What is Driving M&A These Days?

There's an awful lot of merger-and-acquisition activity underway in the US these days. If you wanted to 'play' it in a relatively accessible way you could doso through a merger and arb oriented ETF, such as John Spence discusses in his "Fund Track" in today's Wall Street Journal.

(I'm not suggesting you do any such thing, by the way. The observation was purely hypothetical. My readers are clearly too smart to take market advice from blogs.)

Anyway: what is driving it? Are these directors, eager to build empires? CNBC says not, that it is shareholder driven.

It may simply be that there is too much cash out there. Nobody wants to sit on cash. One wants to put it to work. But over the last couple of years, the idea of putting cash to work has been scary. Buying another firm, one that has a track record or perhaps one with assets that create some synergy with one's own, may be one of the least scary ways to do so.

The bearish case on mining stocks

The "Heard on the Street" column of the Wall Street Journal, written in this instance by Arindam Nag, set out the bearish case on mining stocks on August 26.

One intruguing idea in the column is that the rise of specialized ETF funds may have been bad news for such stocks.

"With investors able to invest directly in commodities through exchange-traded funds and other vehicles, they don't have to dig into mining companies themselves to retain long-term exposure to metals."

Okay, but we don't want to be nagged, Arindam.

Cymbal clash. You're a beautiful audience. I can feel the love in this room.