Author: David Wang
Covestor model: Event Driven Value
Warren Buffett had three types of investments when he ran his partnerships: generals, work outs, and control investments. We focus on the first 2 (generals and work outs) and will ignore the third category because we do not have the capital to control a business.
Generals are investments that are undervalued without any clear catalyst in sight to unlock value. These investments tend to follow the same movement as the market and perform well when the market advances. Work outs are investments that are undervalued with a catalyst to unlock value. These investments tend to be market neutral and are short term investments compared to generals.
We currently have more generals than work outs, but would like a more even mix so we are looking to add more work outs to our Event Driven Value portfolio.
