Investment Objectives and Strategies
Chapters in this video
- 0:00 The matchmaker problem: objectives versus strategies
- 0:46 Five investment objectives as dating profiles
- 2:04 The playbook: value, deep value, distressed, momentum, index, quantitative
- 3:03 Wedding crashers: special situations and event-driven
- 3:29 Matchmaking issuers to the right investor base
- 4:46 Exam trap: risk arbitrage is merger arbitrage
- 5:27 Exam trap: GARP is a filter, not a separate category
- 5:48 Exam trap: special situations and event-driven overlap
- 6:08 Rapid-fire exam recap
What this video covers
- Why objectives describe the destination (capital appreciation, value income, growth, aggressive growth, GARP) while strategies describe the playbook to get there
- How growth at a reasonable price (GARP) filters growth stocks by valuation, and why it is NOT a separate asset class from growth
- What distinguishes value, deep value, and distressed strategies: each hunts for bargains, but at progressively deeper levels of financial trouble
- How special situations and event-driven strategies overlap in practice: spinoffs, restructurings, and post-bankruptcy equity where standard valuation frameworks break down
- Why risk arbitrage is merger arbitrage specifically: long the target, short the acquirer, betting on deal completion at announced terms, and what happens if the deal breaks
- How to match issuer offerings to the right investor base: growth-stage technology IPOs to growth funds, distressed exchange offers to distressed-debt and special-situations funds, spinoffs to event-driven managers, and high-dividend follow-ons to income and value-income funds
- The quantitative, index, momentum, long, short, income, and sector-specific strategies and which investor profiles each attracts
Read the full lesson, free
This video's complete written lesson is free to read in the CertFuel app, no signup wall. The complete Series 79 course also includes adaptive practice questions and spaced-repetition flashcards.