In this podcast episode, Roger Fan, CIO of RF Capital Management, dives into Joel Greenblatt's book "You Can Be a Stock Market Genius," which highlights the concept of special situations in investing. Fan discusses Greenblatt's impressive success and his focus on special situations that arise from market mispricings. He shares specific examples, including spinoffs like Host Marriott, risk arbitrage with L'Occitane, and post-bankruptcy scenarios such as Kmart. Throughout the conversation, Fan underscores the significance of grasping market psychology, pinpointing catalysts, and adopting a concentrated investment strategy, all while echoing Greenblatt's principles. He also stresses the necessity of thorough due diligence and careful risk assessment for each investment opportunity.
