Speaker A
Key takeaways from You Can Be a Stock Market Genius by Joel Greenblatt. One, the best opportunities exist where no one else is looking. This includes spin-offs, restructuring, mergers, and bankruptcies. Two, make sure you do the work that others don't. Read the filings and get your hands dirty. Three, special situations equal hidden value. If you can uncover short-term dislocations, that's what creates long-term opportunities. Four, spin-offs can be a gold mine. Whenever you see the word spin-offs in the news, pay attention. Five, know why something is cheap. There's always a reason that the market is pricing something cheaply. Find out if that reason is temporary or permanent. Six, insiders' incentive matters. Look for owner-operators with equity skin in the game. Seven, bankruptcy, rights offerings, and mergers are all opportunities. The more complex the situation is, the more opportunity there is for misunderstanding. Ignore short-term volatility. Remember to be patient and remember that stocks don't know that you own them. Don't diversify for its own sake. Concentration is key when you find a special situation. And the edge is in the structure of the deal. You don't have to be smarter than the market. You just need to be more focused. This is a great book that every investor should study thoroughly.
