While there are various styles of investing, we can categorize them under three key heads: Special Situations (Arbitrage): Open offers, rights issue, mergers would all fall under this category. One is betting on a specific corporate action with well-defined timelines and aim to make a certain return independent of what happens to the company’s fundamentals or market sentiment. Typically aim is to beat fixed income return while not taking any material risk. Holding period ranges between few days to few months. Re-investment risk is high as one has to keep looking for new opportunities which also involves sitting on cash in between. (Suggested Reading: You Can Be A Stock Market Genius By Joel Greenblatt) Statistical Bargains: These are average businesses which are available very cheap – below liquidation value/cash, at …