Warren Buffett: How To Make Money From ‘Work-Out’ Investments (1957)
The market decline has created greater opportunity among undervalued situations so that, generally, our portfolio is heavier in undervalued situations relative to work-outs than it was last year.
A work-out is an investment which is dependent on a specific corporate action for its profit rather than a general advance in the price of the stock as in the case of undervalued situations.
While not in the classification of work-outs, they have very little dependence on the general action of the stock market.