Special Situations Investing
Posted: June 14th, 2020, 9:21 pm
Does anyone on here have any experience with special situations investing? In particular, I'm talking about things like merger arbitration, spin-offs, recapitalisation etc.
I've recently finished 'You can be a stock market genius' by Joel Greenblatt and he describes various situations where the smaller investor can profit by taking advantage of the way institutional investors behave during events like spin-offs. Essentially, he argues that by reading through the submitted documentation for these corporate actions one can spot good value bets that institutional investors avoid. However, the book was written in the late 90s so I'm wondering if similar situations crop up now.
My own personal hunch is that the market inefficiencies that produced these situations in the 90s have dried up now in the same way as merger arbitration went from being a good way of making a profit in Ben Grahams day to a risky enterprise by the time Greenblatt was trying it.
Any thoughts or opinions welcome.
I've recently finished 'You can be a stock market genius' by Joel Greenblatt and he describes various situations where the smaller investor can profit by taking advantage of the way institutional investors behave during events like spin-offs. Essentially, he argues that by reading through the submitted documentation for these corporate actions one can spot good value bets that institutional investors avoid. However, the book was written in the late 90s so I'm wondering if similar situations crop up now.
My own personal hunch is that the market inefficiencies that produced these situations in the 90s have dried up now in the same way as merger arbitration went from being a good way of making a profit in Ben Grahams day to a risky enterprise by the time Greenblatt was trying it.
Any thoughts or opinions welcome.