Once one stretches the long-term-memory muscle, it's easy to see buyout rumblings are incredibly common and the rumors frequently don't add up to a hill of beans -- and they frequently cause investors to lose money.
Let's take a walk down memory lane; some investors have gotten seriously burned by deploying their cash in this way.
Also in 2010, some investors thrilled to the idea that Akamai
Last October, rumormongers gossiped about the idea that L'Oreal was checking out Avon
Talbots isn't the only stock that's been buoyed by the titillating concept of an acquisition. Chico's
I'll give those who have invested in Talbots recently one piece of credit where it's due: Sycamore Partners -- and not an unnamed, unsubstantiated suitor -- is a truly interested party that fully disclosed its intentions. Who knows; maybe some folks who bought Talbots at its lows will luck out on this one, but there's still no guarantee.
And that's the problem: Investing this way is more like gambling and relies too much on luck. A far more fruitful, positive path to investment success is to seek out strong companies that are functioning just fine on their own business strength.
Just as with any addiction, the first path to kicking the gambling jones is to admit to the problem in the first place ... and then fix it. Let's hope more investors can see past the rumormongering "excitement" and focus more on long-term businesses than hoping for lucky breaks.
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Alyce Lomax owns no shares of any of the companies mentioned. The Motley Fool owns shares of Google and RadioShack. Motley Fool newsletter services have recommended buying shares of Google. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.