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While Washington Stews, You Can Cash In on the Biggest "Tax-Inversion" Deal in History

Back in June 2012, we recommended that you pick up shares of Big Pharma player Abbott Laboratories Inc. (NYSE: ABT). The reason: Abbott was planning to split in two at the end of the year, meaning folks who took our advice would end up with stakes in two companies for the price of one.

There was more than bargain-basement thinking at work here.

You see, these corporate breakups – known as spin-offs – have a habit of turning into market-beating profit plays. And the newly minted spin-off firms often end up as takeover fodder – also at big profits.

Abbott followed part of that blueprint.

  • Featured Story

    One of the Telltale Signs Behind Risky Stocks

    Short-term corporate thinking has been blamed for many of America's economic ills.

    With little foresight beyond next year, management sometimes closes down plants and fudges accounting to make this year's earnings look better and boost the stock price.

    Often, it is simply because management is excessively rewarded by short-term incentives such as stock options.

    While investors might benefit from these shenanigans in the short-run, a new study points out the long-term effects are frequently negative.

    A new Harvard Business School study entitled "Short-termism, Investor Clientele and Firm Risk" has shown that short-termism is bad for investors increasing their risks without any corresponding increase in returns.

    In other words, risk and the short-term thinking usually go hand in hand.

    Breaking Down the Conference Call

    The study used a very interesting method to find out which companies are short-term oriented or more risky.

    To continue reading, please click here...
    Read More...
  • risky stocks 2012