CATALYSTS

“Sometimes the only thing standing in the way of a cheap stock and a profit for an investor is a catalyst that can make the market take notice. Both insider buying and activist investors can provide the push that makes the market realise a stock is good value” Christopher Browne

“Undervalued stocks can remain under-priced indefinitely if nothing happens to them. We ask ourselves what the catalysts are that can turn around these fallen companies” Thomas Kahn

“We need catalysts because we need to make money for our investors every year” Steve Major

“I believe it is important to identify a catalyst that should help benefit the valuation. The approach of identifying a very cheap stock that often has been cheap for a while and then just crossing your fingers and hoping the world will wake up and be willing to assign a higher valuation one day soon is not a very effective approach in my judgement” Lee Ainslie

“A catalyst for the realization of underlying value is something we seek, but we will also make investments without a catalyst when the price is sufficiently compelling” Seth Klarman

“I believe definitive catalysts create a much higher-probability way to extract value over time” H. Kevin Byun

"Passage of time at a low valuation, assuming reliable cash flows and a durable franchise ranks as an important catalyst.  However we look for other catalysts as well, including asset divestitures, smart synergistic acquisitions, share buy-back programs, dividend initiations, analyst upgrades, insider buying, judicious capacity expansion in growth markets and others - the more catalysts the better" Alex Roepers

"Investors should pay attention not only to whether but also to why current holdings are undervalued. Look for investments with catalysts that may assist directly in the realization of underlying value." Seth Klarman

“Undervalued stocks are of interest when several or all of the following criteria are met; if the undervaluation is substantial; if there is a catalyst to assist in realization of that value; if the business value is stable and growing, not eroding; and if the company’s management is able and properly incentivized” Seth Klarman

“The longer you’re in an investment, the longer you’re subject to exogenous risks. If you can influence change sooner, it increases your IRR and reduces macro economic risk." Russell Glass

“I need to have conviction in all my shorts about either a company specific catalyst or a macro catalyst” Whitney Tilson

“While we love catalysts on the long side, we require them on the short side. Valuation shorts are always tricky” Shawn Kravetz

"The presence of a catalyst serves to reduce risk.  If the gap between price and underlying value is likely to be closed quickly, the probability of losing money due to market fluctuations or adverse business developments is reduced" Seth Klarman

"Without catalysts, any near term market prices are a random walk" Marty Whitman

"Positions with catalysts tend to lag a rapidly rising stock market and outperform a lacklustre of declining one"  Seth Klarman

"In any situation, we try to isolate idiosyncratic events and find a catalyst to realize value, to accelerate outcomes. Time is risk. So the longer you are at risk, the more things that you haven’t been able to analyze can happen. You’re accelerating time frames to achieve rates of return and control risk." Jonathan Pollock