In my opinion, Event-Driven strategies are the best strategies out there. Why? A few reasons:
- They can be profitable no matter what type of market environment, bear or bull market
- Profits from event-driven strategies come from blatant mispricing of stocks in the market, not from technical analysis or analyst recommendations, etc.
- Past performance of event-driven value strategies is stellar
One of the all time greatest investors, Warren Buffet once said that the best investments are usually a result of some type of corporate event that causes the stock to be mispriced.
Event-driven strategies usually involve large-scale corporate events such as a mergers, bankruptcies, acquisitions, liquidations, and my all-time favorite, spinoffs. Read my next post to find out why spinoffs can be such lucrative investments.