Special situations and market inefficiencies are highly contrarian investments that may offer huge price appreciation. They typically fly under the radar, are “too complicated” for many investors to understand, or go against overall investor psychology. Finding these investments takes great effort but may reap tremendous rewards.
Special Situation – a security whose price stands to appreciate sharply as a result of circumstances unique to that company. Examples:
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Market Inefficiency - an event that causes a security to sell temporarily at a discount to its intrinsic value. Examples:
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