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SO, the big merger news today is that Disney is going to buy Marvel. Marvel has been doing reasonably well lately, thanks to the recent popularity of comic book movies. The deal is being valued at around $4 billion. (Incidentally, that is the amount of the initial profit taxpayers have made on bank bailout paybacks.) At any rate, the shareholders who own Marvel right now will receive $30 cash per share they own. They also get 0.745 shares of Disney for each share of Marvel that they own. Which is kind of a bummer, since Marvel closed at $38.65 on Friday. Let’s do some really simple math for a minute, to see how this works out. And Disney closed at $26.84.

Let’s say you own 100 shares of Marvel. On Friday, these shares were worth $3,865. If you wait for Disney to buy them, they are worth $3,000. You will get this in cash. However, you will also get some Disney stock. You will end up with 74.5 shares of Disney on top of the cash. So, going with Friday’s close, that means your new Disney shares are worth $1,999.58. So you come out ahead after all — if you sell your Disney shares and your taxes and transaction fees don’t end up destroying the value.

Of course, this doesn’t take into account things like taxes, the fact that Disney stock is down along with the rest of the market (Marvel stock, though, is up today), and other factors. It’s just a rough estimate of the deal, which turns out to be a pretty good one for Marvel holders. Of course, with Marvel stock trading at $48.45 right now, you could end up with $4,845 in cash if you sell. Which still doesn’t quite overcome the advantage of Disney’s cash plus stock offer.

My real question is this: Will Disney ruin the Marvel comic movies I have been enjoying lately?

Disclaimer: I am not an investment professional. Nothing in this piece or on this Web site should be construed as investment advice. Before making investment decisions, do your own research and/or consult with an investment professional. All investment comes with the risk of loss. You are responsible for your own investment decisions and any loss that may result from your decisions.

Right now, there is a bit of jitters with regard to corporate bonds. The specter of recent bankruptcies makes potential bond holders nervous that they won’t receive their money back. However, for those who are willing to take a chance, it might be time to get back into corporate bonds. Here is what Jeff Rose, CFP, says about corporate bonds at Good Financial Cents:

Perhaps most importantly, Corporate Bond valuations still look attractive and  the investment thesis of investors being paid to wait is still very much valid. At a 2.5% yield advantage to Treasuries, investment corporate bond yield  spreads are still 1.0% above the historical average. The 2.5% yield advantage is more impressive considering a 10-year Treasury yield under 4%. The  yield advantage creates a high hurdle for government bonds to outperform

If you really have the stomach for it, Rose offers this information on high yield corporate bonds:

In the high yield market, the current yield spread of 9.1% remains well above the 5.5% average. Defaults continue to rise in the high yield market, with Moody’s forecasting defaults to peak at 12% in the fourth quarter, while  S&P has forecast a peak default rate of 14% for the first quarter of 2010. While alarming on the surface, the estimates have come down over the past  couple of months, and investors are looking past the peak toward a decline  in default rates in 2010.

Clearly, there is some hope there to make a little bit better yield with corporate bonds by adding them to your portfolio. You can even look into emerging market bonds if you want a little international diversity in your bond portfolio. However, it is important to realize that you take on additional risks. These bonds have higher default rates, and you run the risk of losing your principal.

Disclaimer: I am not an investment professional. Nothing in this piece or on this Web site should be construed as investment advice. Before making investment decisions, do your own research and/or consult with an investment professional. All investment comes with the risk of loss. You are responsible for your own investment decisions and any loss that may result from your decisions.

One of things that happens with money is that we get emotionally involved. This is especially true in the case of investments. Because investments (especially if they are leveraged) can result in large losses, people tend to get jumpy when the news is bad. And, if the news is especially bad, or if sentiment is dour, it can lead to mass selling and panic. Noble Trading offers this look at panic selling:

All kinds of traders - individual and institutional short and long-term traders, investors, fund managers - are often involved in panic selling. The selling activity is so high that everyone wants to get out of their holdings as early as possible without any regard/demand to the prices at which they sell. Most traders involved in panic selling may have to suffer serious losses.

Often it is the pure human emotion of fear and nervousness which controls the panic selling activity rather than the fundamental or technical market analysis. Many times, the media too can add fuel to the fire.

The problem with panic selling is that it is the result of letting fear rule you. While you should always be cautious, it is important to not have your mind clouded by fear. This is especially the case if you have a long term investing plan. You need to keep a cool head and evaluate the fundamentals of your investment. You don’t want to sell something that is fundamentally good, but going through a rough patch.

Another issue is that panic selling turns the whole “buy low, sell high” maxim on its head. When you are clouded by fear, you sell low and wait until the investment has recovered, when it costs more, to buy. This limits your profits, and keeps you from reaching something closer to your potential.

This is why I like index funds. It is less worry, since they follow entire market performances, helping you benefit from overall long-term trends, rather than steeping you in worry about individual investments and stock picking.

Disclaimer: I am not an investment professional. Nothing in this piece or on this Web site should be construed as investment advice. Before making investment decisions, do your own research and/or consult with an investment professional. All investment comes with the risk of loss. You are responsible for your own investment decisions and any loss that may result from your decisions.