Focused Investing Areas
Event driven situations involve publicly traded companies in the throes of a shareholder activist campaign with the objective of unlocking a suppressed share price. The drivers of this initiative are corporate events such as mergers/aquisitions spinoffs, and takeovers among others.
Risk or merger arbitrage is a strategy whereby profit is realized from capturing the price spread between an announced buyout price and current price after the news release. The spreads are usually small as the price will typically trade up to a few hundred basis points below the deal price.
Great companies purchased at reasonable prices held over the long run has proven to be a winning strategy over the last century. Long term investing turns a competitive disadvantage into a very strong advantage as markets prices vacillate in the short run but tend to align with intrinsic value over the long run.