Benjamin Graham profited from opportunity.

Sure, the father of value investing gave us the analogy of Mr. Market and the concept of "margin of safety." But his real claim to fame was making lots of money from special stock opportunities called "net-nets" -- stocks trading for less than two-thirds of their net current asset value. When we get right down to it, that's what special-situation investing is: Finding mispriced opportunities with special circumstances.

While it's nice to find great companies at good prices, we shouldn't neglect these other, potentially lucrative types of investments. Warren Buffett sought out special situations, including American Express (NYSE:AXP) after its salad-oil scandal, in his original partnership. Walter Schloss, another Ben Graham disciple, outperformed the market for years by finding mispriced stocks. Joel Greenblatt even wrote a book highlighting special situations, called You Can Be a Stock Market Genius.

Special situation investing methods
The net-net deep-value opportunity is not the only type of special situation. In turnaround situations, a company with problems fixes them and gets back on track. Peter Lynch loaded up Fidelity Magellan on Chrysler (NYSE:DCX) when the automaker had to overhaul itself.

There are also spin-offs, a favorite of David Einhorn of Greenlight Capital. He's got two big ones in his portfolio: Ameriprise (NYSE:AMP), from American Express, and Genworth (NYSE:GNW) from General Electric (NYSE:GE). Both are handily outperforming the market since they left their respective nests.

And sometimes, an investment's value is hidden from plain view, leading the market to misprice it. Bill Mann found Fairmont Hotels before it went private, while it was trading for less than the value of its premium hotels. OSI Restaurant Partners (NYSE:OSI) also owned some nice real estate that the market neglected to value correctly.

Fools, beware: These types of situations are not for novice investors. (Do you know what net current asset value is?) To help you learn more about them, and expose you to other special situations, we've compiled a great batch of articles. Some come with warning labels, some have complex economics, and some require digging deep to find value. Along with the examples, we discuss the mindset required to put such investments to work. Click the links below to start learning about how special situations can be opportunities knocking at your door.

A smorgasbord of starters:

Explore the different kinds of turnarounds:

Meet some other special situations that occasionally appear:

Do you consider yourself a special situations investor, or are you interested in learning more about these opportunities? Tell us about your interests in our very brief Special Situations Investing Survey. Your comments will help us develop future content to fit your needs.

Fairmont Hotels is a former Hidden Gems recommendation. OSI Restaurant Partners is an Inside Value selection.

Retail editor and Inside Value team member David Meier learned about evaluating great companies and special situations at Wake Forest. He is a beneficiary of GE shares, but he does not own shares in any of the other companies mentioned. He is currently ranked 266 out of 23,837 investors in The Motley Fool's CAPS rating service. You can view his TMF profile here. The Fool takes its disclosure policy very seriously.