Selling Schering Plough

Investment Club Investors:

Merck has offered to buy Schering Plough.

The offer was above Schering Plough's market price value, so, like we experienced when Inbev bought Anheuser Busch (which we previously owned) the shares of Schering Plough have surged quite a bit and will eventually be liquidated for a combination of cash and Merck shares.

We bought our first shares of Schering Plough six years ago--in January 2003. We then bought aggressively when the price dropped into the $14 range. A few years later, we sold half of our shares at the $23 range. Our average cost for the shares is $15.24. Currently, they are trading at $21.08. Including dividends, we have made roughly 51% on our Schering Plough shares, and a couple of things are evident to me:

I don't want any Merck shares at this time, and I think we could usefully put the Schering Plough proceeds to work more efficiently.

As such, I placed an order to sell our Schering Plough shares and buy 1000 more shares of General Electric.

All recent letters to investment club shareholders are on my blog:
http://buffettsbedandbreakfast.blogspot.com/

Andrew