Investment opportunity in adversity: Hold your nerve to profit from crisis

Investing in special situations can help you tap opportunities that arise during adverse conditions

Clouds that gather over companies from time to time can rain profits for the smart investor. The great ones like Warren Buffett have made a career out of these opportunities, when the vast majority scurried for cover at the very whiff of trouble. The ability to see opportunity in adversity is what distinguishes investment greats from the average Joe. 

A look at Warren Buffett’s most successful investments will tell you that crisis investing can be immensely profitable. In 2011, Buffett bought $5 billion worth of Bank of America’s preferred stock, which would come with a 6 per cent dividend. He also