My First Million
The best business ideas come from noticing what's working and doing it better, faster, or for a different audience.
Distressed Asset Opportunity Recognition
Timeframe: Ongoing cyclical opportunity, peaks during economic downturns
What's Changing
Sophisticated investors are systematically finding value in distressed, stigmatized, or crisis-affected assets while others flee
Driving Forces
Increased market volatility creating more distressed situations
Emotional decision-making by retail investors creating mispricings
Better analytical tools for valuing complex situations
Reduced stigma around contrarian investing
Winners
- Distressed debt specialists
- Contrarian value investors
- Legal professionals specializing in bankruptcy
- Due diligence and research services
Losers
- Emotional retail investors who sell during panic
- Traditional growth investors avoiding complexity
- Companies without crisis management skills
How to Position Yourself
Develop skills in bankruptcy and distressed analysis
Build network of sources for distressed opportunities
Create systems for rapid due diligence during crises
Maintain dry powder for opportunistic investments
Early Signals to Watch
Example Implementation
“Create watchlist of potential distressed situations, develop rapid analysis framework, maintain capital reserves for crisis opportunities like FTX bankruptcy claims.”
Related Knowledge
trouble is opportunity
Crisis situations often create mispricings and opportunities for sophisticated investors willing to act when others flee
when I See Fire I run towards it
Experienced investors should move toward crisis situations rather than away from them, as crises create opportunities
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A decision-making framework where you categorize opportunities into 'obviously good', 'obviously bad', and 'too hard to judge' - then only act on the obviously good ones.