Shop now Shop now Shop now  Up to 70% Off Fashion  Shop all Amazon Fashion Cloud Drive Photos Shop now Learn More Shop now Shop now Shop Fire Shop Kindle Shop now Shop now
Customer Review

0 of 1 people found the following review helpful
3.0 out of 5 stars One Secret of Buffett's Early Exceptional Market Returns, 1 April 2013
This review is from: Warren Buffett and the Art of Stock Arbitrage: Proven Strategies for Arbitrage and Other Special Investment Situations (Hardcover)
One of the great "secrets" of Warren Buffett's wealth accumulation was his skill in arbitrage investments. As an example: Berkshire's stock portfolio performance from 1980 to 2003 had an average annualised return of 39.3% from 261 investments - 59 arbitrage deals produced an annualised return of 81.3%. Those deals had a huge effect on Berkshire's overall performance. Arbitrage was the secret for great results in down years for the S&P500 - when the market was taking a nosedive, he leveraged up on the arbitrage deals and made significant returns.

Buffett's ex-daughter-in-law Mary has written a series of books on his investing style, and this one is a perfect example of the "Do as I say, not as I do" nature of Buffett-watching. You won't hear him talk of arbitrage in his public pronouncements, but as the numbers above demonstrate, they're a very real factor in his success over time.

There are two specific keys to Buffett's success with arbitrage - and the fact that he hasn't put himself or his company in danger:
1) he focuses on "certain" or near-certain events: publicly announced, friendly takeovers in the main, and
2) rather than use leverage, he focuses on an "annualised" return, and uses the insurance float his company possesses to provide him with the investment funds to act.

The book is full of practical examples of Buffett's arbitrage - you'll spot the flaws in some that couldn't be achieved today because of changes in market conditions. Smart readers might also vividly recall that the News/Sky public takeover would have fitted neatly as an example - but would have cost a traditional arbitrageur dearly.

But focus on "certain" events, and avoid leverage, and you might spot some opportunities after reading this book in your lifetime.
Help other customers find the most helpful reviews 
Was this review helpful to you? Yes No

Be the first person to comment on this review.

[Add comment]
Post a comment
To insert a product link use the format: [[ASIN:ASIN product-title]] (What's this?)
Amazon will display this name with all your submissions, including reviews and discussion posts. (Learn more)
Name:
Badge:
This badge will be assigned to you and will appear along with your name.
There was an error. Please try again.
Please see the full guidelines ">here.

Official Comment

As a representative of this product you can post one Official Comment on this review. It will appear immediately below the review wherever it is displayed.   Learn more
The following name and badge will be shown with this comment:
 (edit name)
After clicking on the Post button you will be asked to create your public name, which will be shown with all your contributions.

Is this your product?

If you are the author, artist, manufacturer or an official representative of this product, you can post an Official Comment on this review. It will appear immediately below the review wherever it is displayed.  Learn more
Otherwise, you can still post a regular comment on this review.

Is this your product?

If you are the author, artist, manufacturer or an official representative of this product, you can post an Official Comment on this review. It will appear immediately below the review wherever it is displayed.   Learn more
 
System timed out

We were unable to verify whether you represent the product. Please try again later, or retry now. Otherwise you can post a regular comment.

Since you previously posted an Official Comment, this comment will appear in the comment section below. You also have the option to edit your Official Comment.   Learn more
The maximum number of Official Comments have been posted. This comment will appear in the comment section below.   Learn more
Prompts for sign-in
  [Cancel]