Investing for Survival
12 things I learned from David Tepper: #4
When you make an investment in distressed debt your ownership interest can (under certain circumstances) convert into equity ownership, which gives you certain control rights that can be helpful in generating the return you desire. People who understand areas like bankruptcy and finance can do things like determine what is likely to be the “” which will convert into sufficient equity to exert some measure of control when the business restructures via a plan of reorganization. This sort of activity combines investing with the profession of distressed investing/bankruptcy. Distressed investing is not an activity where amateurs and people learning on-the-job experience a positive result. That David Tepper can do it does not mean that you can do it.
Bonus: If you don’t sell high, you can’t buy low (medium):http://streettalklive.com/index.php/blog.html?id=2765