In this exclusive excerpt from his seminal work on special situations investing, author and trader Maurece Schiller shows how to profit from companies undergoing a reorganization, merger, acquisition, spinoff or corporate misstep. First chapter reproduced by publishers' permission.
Editor’s Note:
Porter & Co. follows a lighter publishing schedule in August, which gives our team a little breathing room to enjoy time with their families. But we’re still monitoring portfolios, and sending updates on our open positions for all our services.
And each week during the month, Big Secret readers will receive a short issue with a special literary excerpt or investing insight that you won’t see anywhere else.
Don’t forget: while you’re waiting for "business as usual" to resume the first week of September, there’s still plenty to do...
Please, go through our back issues, which include many valuable buy-and-hold recommendations and timeless stories. (We’ve recently updated our website, giving subscribers a simpler way to access all our reports and recommendations on a single dashboard.)
We believe strongly that the best investment time horizon is forever. Time is our greatest advantage as investors in capital efficient, high-quality businesses – as you’ll see in the results of our portfolio.
At the very least, we hope you will become familiar with our strategy by understanding our investments in Hershey, NVR, WR Berkley, and Domino’s. There’s a lot more to these businesses than their customers realize. And when you begin to understand the financial architecture that lies underneath these companies’ products and services, you’ll be on your way towards becoming a great investor.
We hope you’ll remember who showed you these secrets, and remain a paid-up subscriber for as long as you hold these investments – forever!
And now, please enjoy today’s issue...
A Look Inside An All-Time Investment Classic – Plus A Detailed Portfolio Review
This week’s edition of Big Secret is a special one – literally...
By arrangement with the publishers, we are reproducing chapter 1 of a seminal investment classic first published in 1955: Special Situations in Stocks and Bonds by Maurece Schiller.
Schiller – a trader and author who started his career on the floor of the New York Stock Exchange in 1920, and went on to write five acclaimed books – was fascinated by “special situations” in investing.
He didn’t focus initially on a company’s fundamentals or the details of its business model. Instead, Schiller looked for companies experiencing some sort of dramatic shakeup – a reorganization, merger, acquisition, spinoff or corporate misstep – that (hopefully, temporarily ) depressed the stock price.
Once he’d found a company in this type of “special situation,” and assessed the chances that the company would find its way again were good, Schiller would buy shares and wait. Usually, his patience... and the investment... would pay off as the company resolved its issues and returned to profitability.
That’s the strategy Schiller explores in his classic text Special Situations in Stocks and Bonds, the first chapter of which you can download and read here.
Of course, special situation investing involves plenty of research and analysis before point-and-click...
The trick is finding special situation investments that will recover. Plenty of companies never get over the trauma of an acquisition or a leadership reshuffle or missing out on a new market.
And that’s where our newest Porter & Co. project comes in...
Behind the scenes (we haven’t really taken that much time off this August...) our team has been hard at work on a brand-new advisory that focuses on a particular kind of special situation investing... from a unique boots-on-the-ground angle. It’s unlike anything you’ll see anywhere else… we promise.
As always, Partner Pass members will have immediate access to this new product. Learn more about Partnering with us here.
We’ll have more details for you in coming weeks.
In the meantime, please enjoy this exclusive excerpt from Maurece Schiller’s Special Situations in Stocks and Bonds.
Paid-up readers can also access our Big Secret on Wall Street portfolio update immediately below.
This content is only available for paid members.
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