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Hi Reader, here's what you need to know for February 23rd in 3:15 minutes.

☕️ Finimized over a spiced chai latte at Tr.Eat Cafe in Muscat, Oman (24°C/75°F ☀️)

Today's big stories

British security firm G4S isn't in the middle of a bidding war any more
Here’s how to decide exactly how much money to put into your shorter-term positions – Read Now
Goldman Sachs reckons oil prices will rally sooner and higher than it previously thought

Out Of Order

What’s Going On Here?

A bidding war for G4S – the world’s biggest security firm – came to an end on Monday, and its shares dropped by their most in a year. Didn’t see that coming…

What Does This Mean?

With a rise in the fear of terror attacks has come a rise in the global security market, and Allied Universal and GardaWorld – both private companies – are battling to run the show. So what better way to do that than by acquiring UK-listed G4S, which has been plagued by multiple crises – from lost prison contracts to alleged human rights abuses – over the last few years.

GardaWorld saw its moment to strike when last year’s market turbulence took its toll on G4S’s share price, and it made a hostile bid to take over the business. But Allied took a more softly softly approach, wooing G4S with acquisition talks until – after months of back and forth – it finally won the face-off on Monday.

Why Should I Care?

For you personally: Try not to jump the gun on mergers and acquisitions.
G4S’s shares had risen 80% since the start of the stand-off, and investors might’ve been hoping Allied Universal and GardaWorld’s rivalry would keep driving the price up. But when GardaWorld refused to raise its latest bid, investors reversed course and sent its shares down 10%. So if you’re eyeing up takeover candidates’ stocks, it’s worth remembering that the process can lead to big price moves – and nothing’s a done-deal till the deal is actually done.

The bigger picture: Regulators could poop on the party too.
There’s one other big risk to the takeover process: regulators can block an acquisition if they think it might hurt consumer choice or disturb a key national industry. Case in point: Canadian convenience store chain Couche-Tard was told last month it wasn’t allowed to take over French food retailer Carrefour, after the latter’s government put its foot down and said “Mais non!”

You might also like: Do mergers and acquisitions help or harm your portfolio?

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2. Analyst Take

Three Steps To Perfectly Sizing Your Positions

What’s Going On Here?

Lots of investors underestimate the importance of carefully sizing their positions: they just put a round percentage of their stash in a stock and figure it out later.

But position sizing can have a significant impact on your results, and should be an integral part of your investment process.

It’s especially important for tactical trades – short and medium-term views on macroeconomic trends like inflation, or on stock-specific opportunities like an earnings-related price pop.

And they require a slightly different approach to sizing than the one you might use to manage your long-term passive portfolio.

So that’s today’s Insight: three steps to perfectly sizing your positions.

Read or listen to the Insight here

Full-Filled

What’s Going On Here?

According to a report released over the weekend, Goldman Sachs thinks the oil price is going to get a substantial top-up sooner than it previously thought.

What Does This Mean?

Demand for oil has finally started rebounding from last year’s pandemic-driven lows, with the dusky nectar’s price gaining more than 20% this year. But Goldman thinks that rally’s only just beginning: the firm says the oil price will rise another 20% by the third quarter of the year (tweet this).

There are a couple of reasons why. First, Goldman thinks demand will be back to pre-pandemic levels by late July, with the vaccine rollout driving economic activity higher. And second, it reckons supply will keep lagging: oil producers are, after all, showing no signs of significantly ramping up production in the next two quarters.

Why Should I Care?

Zooming out: Commodities are a good way to protect against inflation.
Between the mooted economic recovery and uptick in government spending, investors are starting to feel more confident that the prices of the world’s goods and services will rise (i.e. inflation). And as the prices of goods and services increase, so will the prices of the raw materials used to produce them. That’s why commodities are seen as a good “hedge” against inflation – another thing that could, according to Goldman, drive oil’s price higher.

Zooming in: The big freeze in Texas isn’t too big a deal for oil.
The unprecedented cold snap in Texas – America’s biggest energy-producing State – has been moving the oil price lately too. The slippery elixir’s price initially rallied on worries that production would stall and supply would falter, only for that rally to sputter out after investors realized Texan refineries – which would take time to resume operations – would cause a drop in demand. Still, Goldman reckons the effect on supply and demand should balance each other out, and the impact on the global oil market should actually be pretty small.

You might also like: How you can profit from oil’s return to form.

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💬 Quote of the day

“Everything should be made as simple as possible, but not one bit simpler.”

– Albert Einstein (a theoretical physicist who developed the theory of relativity)

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📚 What we're reading

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💪 Get your portfolio ripped

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🌱 The Science Of Sustainable Investing: 4pm UK Time, February 25th
🙋 Investing in Women: 6pm UK Time, February 25th
🌈 Financial Planning for the LGBTQ Community: 2pm New York Time, February 26th
💪 Q&A with Finimize CEO, Max Rofagha: 1.30pm UK Time, February 26th
🔥 The Easy-Does-It Wealth-Building Strategy: 7pm Singapore Time, February 26th
💥 The 2020s: Boom Or Bust?: 1pm UK Time, March 2nd
💪 The Power Of Thematic Investing: 6pm UK Time, March 2nd
💆‍♀️ The Investor Mindset: 1pm New York Time, March 5th
🌍 Investing In Biodiversity: 6pm UK Time, March 3rd
👣 Invest Your Money, Save The Planet: 6pm UK Time. March 9th
📲 What’s Next For Tech: 6pm UK Time, March 10th

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Finimize - 🐘 How to size up your investments

Today's big stories

Out Of Order

What’s Going On Here?

What Does This Mean?

Why Should I Care?

Three Steps To Perfectly Sizing Your Positions

Full-Filled

What’s Going On Here?

What Does This Mean?

Why Should I Care?

💪 Get your portfolio ripped

Older messages

🔥 The hot new financial trend

🤭 Buffett ditches Apple

🤫 Palantir's in for a bumpy ride

😷 Investors bet on coronavirus

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