In a previous post, I talked about how you can create some cash/savings through the use of all of the current rewards options available. I decided to utilize this startegy by paying my recent graduate school tuition bills through a Citibank Dividend Rewards card. With this card, I receive a certain percentage back in cash through a dividend check.

As each semester is completed, I accrue these dividend dollars quickly with my credit card. I just recently requested a dividend check valued $129.57 so that I can create additional passive income by earning interest in my ING account. I will update my net worth to include these savings.

Check back later or subscribe as I provide more opportunities to save and create wealth.

As the termination news on the Penn National Gaming (PENN) merger hits the wire on July 3rd, I realized that I need to bring closure on one of my trading ideas. In my previous PENN merger arbitrage post, I entered into a ”paper-trade” hoping to capture +20% return on 419 shares. Since then, the credit crunch hit this trade in full force dropping the PENN stock price to a trading range of $40-$45/share for about 3 months and then recently pushing the price to approximately $30/share.

Here is the latest 6 month stock price chart:

Updating my trade details for the closing price on July 3rd, the results are ugly….

- Sell 419 shares at $29.66 with a $10 trade commission equals $12,418

- Less my original investment of $25,003

- Net Gain / (Loss) = $(12,586) or (50.3)%

- S&P 500 % gain in the same time period was 17.7% gain

Overall, this is why I have a “paper-trade” account to make sure I understand all of the risks and rewards of a particular strategy and remember these lessons learned when I establish my real money account. With these results, I question how do the hedge funds that employ merger arb strategies protect themselves with the real money accounts? Do they use put options or balance all of the merger arb bets within a larger portfolio…

 If you would like to see my other trading ideas and keep track of my results, feel free to subscribe to Finance Puzzle.

Author Disclosure: I do not own any shares of PENN or FIG. This strategy is highlighted for entertainment purposes for my mock short-term portfolio.

Sources:
Company website
SEC Edgar website
Yahoo Finance

Preparing for our 4th of July summer drive series this year, our car was in need of the 3,000 mile oil change and service. I usually go to to the local Valvoline service center within a few miles of my house because of the high level of customer service and high level of quality they provide over their competitors.

Before heading for this oil change service, I decided to visit the Valvoline website and noticed a $5 coupon with an expiration date of 12/31/2008. I quickly printed it, headed down to the local service center, and 20 minutes later had a $5 savings in my pocket.

As in many of my previous posts, planning and taking a few minutes to scan the internet for any available discounts can save you a significant amount of money (over the long run). Check out my net worth page to see how much I have saved so far.

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