We're in the midst of a very profitable moment for dealmaking, especially in the technology sector. The three hottest M&A transactions of the past three months were worth $33.8 billion – a fraction of the $2 trillion in deals announced this year.
Companies like Microsoft and Verizon are going out and buying firms like Yahoo!, Fleetmatics, and LinkedIn because they offer the irresistible promise of massive growth without the long, drawn-out process (and even higher price tag) of R&D, where there are no guarantees of success.
So you can see why deals are appealing to these huge, cash-flush companies.
But these deals are a great thing for investors, too. Deals can be some of the biggest profit catalysts on the market, in many cases doubling investors' money as the ink dries.
Then again, there are some unique challenges for investors looking to play these profitable special events: Pinpointing when those deals will happen – and who will be doing the buying – is a must.
You don't need to be able to tell the future, though – I'm going to tell you how you can make an "end run" around that particular challenge.