I was reflecting on the performance of my portfolio during the last several years and realized that beyond opportunistic trades both on the long and short sides during the early days of COVID-19 and the use of the merger arbitrage strategy, a large part of it was driven by companies like Vertex Pharmaceuticals (VRTX), Netflix (NFLX) and Meta (META).
These were companies that had temporarily fallen out of favor and provided an attractive opportunity. The key assumption was that the issues or perceived problems they were facing were indeed temporary and for a brief period of time during their regime change from growth to value, they were trading below intrinsic value. If you get that key assumption wrong, you end up with melting ice cube companies like BlackBerry (the old Research in Motion) where there were structural issues once the iPhone was released by Apple (AAPL) and the problems were not temporary in nature.