[[Start here]] → [[What works in stocks?|what works]] → [[diversify for resilience|diversity]] → [[there are six different categories of winning stocks|classifications]] → asset plays --- ![[Asset Plays 1.png]] Peter Lynch stated in [[Lynch - One Up On Wall Street|One Up On Wall Street]] that [[there are six different categories of winning stocks]]. Asset plays are one of them. ## About Asset Plays - Asset plays are any time you know about something valuable that the market hasn't yet woken up to. - Sometimes it's hard assets, oil, metals. - Sometimes it's cash. Sometimes it's tax losses carried forward out of a near bankruptcy. - Sometimes it's real estate - where a local edge can help. If property values have risen, but you know about a real estate holding, you can find a big winner. ## How to deal in Asset Plays - You have to know the value of any assets, hidden or otherwise. - Creditors are first in line, so subtract debt and beware if they are taking on any new debt as it may make the assets less valuable. - You have to sit back and wait for value to be realised, but the presence of activists/corporate raiders may well help shareholders generate value faster. ## Typical two-minute monologue > The stock sells for $8 but the videocassette division alone is worth $4 a share and the real estate is worth $7. That's a bargain in itself, and I'm getting the rest of the company for a minus $3. Insiders are buying, and the company has steady earnings, and there's no debt to speak of. ## When to sell an Asset Play - Sell when the raiders are gathering. After the first raider starts buying, others follow. Institutional ownership growing. [^1]: [[Lynch - One Up On Wall Street|One Up On Wall Street]] - Lynch