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“My two favorite words in the English language: distressed asset”
investingopportunitycontrarian
What It Means
Greatest investment opportunities come from assets selling below intrinsic value due to temporary problems
Why It Matters
Contrarian investing approach can generate outsized returns when others are fearful
When It's True
When underlying asset quality remains strong despite market perception issues
When It's Risky
When distress reflects fundamental business model problems rather than temporary issues
How to Apply
1
Look for quality assets with temporary problems
2
Investigate why assets are distressed before buying
3
Have patience to wait through recovery cycle
Example Scenario
“High-quality real estate in good neighborhood selling cheap due to foreclosure, market panic, or temporary local issues.”