One of the best performing funds this year - actually any year - would be one that shorts the pop on every rumored takeover target. Here is what a partial holdings list would have looked like - all at much higher prices: HPQ (pure lunacy that ORCL would buy them); GM; X: AKS; NFLX (still a short); WLT; RIMM; POT; MU; FCX, CREE; AKAM; SHAW. Of course some of these turn out to be good longs at some point and I own HPQ, RIMM and WLT but bought after rumors didn't pan out. Ironically some become more attractive after large declines such as WLT and RIMM. Rumors are usually code for someone saying "How the heck do I get out of this bad position!"