I got a tremendous response two weeks ago in my letter entitled What is a Spinoff?, where I outlined three of the most important points to look for in a Spinoff investment. I’m glad it helped clarify this obviously profitable but difficult to navigate area. This week I thought I’d detail how The Edge defines a special situation.

So how do we go about looking for that opportunity and what exactly is a special situation in our eyes? Well, I’ll tell you what it’s not. We don’t look at risk arbitrage. Other than that, anything that appears to display some sort of hidden value away from the naked eye (and robots) and that requires our expertise and intelligence in realizing the investment opportunity is fair game.

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