Investors around the world recently learned that from 1980 through 2003
Warren Buffett's arbitrage operations produced an astronomical average
annualized rate of return of 81.28%. Even more amazing, this incredible
rate of return was produced with very low rates of risk. Long
considered one of the most powerful and profitable of Buffett's
investment operations, but the least understood, these special types of
investments have been the edge that made Warren Buffett so phenomenally
successful. Warren Buffett and the Art of Stock Arbitrage is
the first book to examine Buffett's special brand of arbitrage
investing. Buffettologists Mary Buffett and David Clark explore the
previously secret domain of Warren Buffett's stock arbitrage
investments. They explain how Buffett finds deals, evaluates them,
picks the winners from the losers, and when he is willing to use
leverage to help boost his performance in these investments to make
amazing profits. Basic mathematical equations are included to help
readers determine the projected rate of return, evaluate risk, and
determine the probability of the deal being a success.
Buffett and Clark provide detailed explanations and examples of
Warren Buffett's methods for arbitrage, and for investing in tender
offers, liquidations, spin-offs, and reorganizations. They take readers
step by step from the initial public announcement to tendering shares,
explaining how Buffett evaluates risk and maximizes his profit at every
Warren Buffett and the Art of Stock Arbitrage is a valuable
companion to the other books in Buffett and Clark's successful series—Buffettology,
The Buffettology Workbook, The New Buffettology, The Tao of Warren
Buffett, Warren Buffett and the Interpretation of Financial Statements,
and Warren Buffett's Management Secrets.
About The Author
Mary Buffett is an international
bestselling author and speaker on the investment methods of Warren
Buffett. She gained her unique insight while married to Warren's son
Peter for twelve years. She is gifted in her ability to make the
complex world of investments easy to understand and has done so before
audiences from California to New York to London to Beijing.
David Clark holds degrees in both
finance and law, and in the late seventies was the founding member of
the original Buffettologists – a small group of early Berkshire
shareholders who studied the investment methods of Warren Buffett. He
is now recognized as one of the world's leading authorities on the
subject and has written extensively on it. He lives in Warren Buffett's
hometown, Omaha Nebraska, and is the Managing Director of a private
partnership that invests primarily in arbitrage situations.
"International bestselling authors Mary Buffett and David Clark explain how arbitrage turned Warren Buffett from a great investor into a worldwide phenomenon. Arbitrage presents the average investor with the greatest opportunities they may ever have to generate high returns with low risk. Every year many arbitrage deals come along that are within every investor's grasp . . . if you learn how. Warren Buffett and the Art of Stock Arbitrage takes you behind the scenes for a serious exploration of arbitrage techniques that work. I suggest you study and put into practice these simple concepts."
--Gabriel Wisdom, author of Wisdom on Value Investing and syndicated radio host
"The use of arbitrage and special situation investing has always been Warren Buffett's golden lever; yet few investors have realized its value in portfolios, until now. Kudos to David Clark and Mary Buffett for finally bringing these strategies to light and revealing the final puzzle pieces in Buffett's great career."
-- Timothy P. Vick - Senior Portfolio Manager, The Sanibel Captiva Trust Co., author, How to Pick Stocks Like Warren Buffett