Warren Buffet is one of the investment giants in the finance world. Known for his record-breaking returns in the stock market, there is no shortage of books claiming to unlock his secrets. This book is unique in that one of the co-authors is the daughter-in-law of Buffet himself. This gives her unique insight into the man most have only heard of. Readers will learn about arbitrage, which is essentially buying a stock at a lower price than one expects to sell it in the future. While most attempts to "time the market" often end in disaster, Buffet uses the financial news of mergers and acquisitions to decide which stocks to arbitrage. If a company announces that it will acquire another and it is a done deal set to be executed in the near future, that gives Warren the confidence to go forward with the deal. Interestingly enough, apparently Warren leveraged other people's money to get such high profits. In other words, he'd borrow, say, 1.0 million dollars to buy company A's stock, which is later bought out by company B. Company A's stock goes up and Buffet makes 1.2 million dollars and has to pay 0.1 million dollars to his creditor (for borrowing the initial 1.0 million dollars). This yields Buffet a net profit of 0.1 million dollar--not too shabby! While the average investor likely will not have the ability to leverage other people's money, readers can still learn how to stop arbitrage deals to make small profits for themselves. Happy investing!
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