In my last post, I shared about the many models of value investing and how the main “predictable” model most new investors use follow a very ideal scenario that most companies simply do not fit. In reality, investment ideas come in many shapes and forms and may present themselves to you in many, many ways. Often they might come to you in situations that are highly unique and time sensitive – hence the term special situations investing.

What is special situations investing?

A special situation is a particular circumstance that has affected or could affect the value of a company’s stock. Oftentimes, the underlying fundamentals of the stock might not pass the typical value investing criteria but the special situation itself provides a nice opportunity for investors to profit from the situation. The investments are usually not long term in nature; once the special situation has passed over and profit ......