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Warren Buffett and the Art of Stock Arbitrage
Warren Buffett and the Art of Stock Arbitrage

Proven Strategies for Arbitrage and Other Special Investment Situations

Framework

by

Mary Buffett and David Clark

2010

2010

A framework book that details how Warren Buffett generated over 81% annualized returns from 1980–2003 through merger arbitrage, spin-offs, and other special situations. It examines the less-publicized side of Buffett's operation, including his post-announcement decision process, risk evaluation, and use of leverage to amplify low-risk returns. It describes tools, including Benjamin Graham's probability-weighted expected return equation and the discipline of annualizing short-duration returns to compare opportunities on equal footing.

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Jermaine's Notes
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April 2026

"Warren Buffett's Ground Rules" mentioned he used these types of deals to beat his benchmark when markets were down or flat. That book called them "Workouts." This book details exactly how he executed that strategy with examples. Complementary strategy to buy and hold. Converting short-term deals to annualized returns stuck with me. Buffett's use of leverage surprised me. Read 2010 hardcover.

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Warren Buffett's Ground Rules
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August 2025

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This framework distills the principles Warren Buffett applied at his investment partnership, Buffett Partnership Ltd., from 1956 to 1969. During this period, he delivered exceptional returns without a single down year. Each chapter focuses on a core investing principle, illustrated with excerpts from his partnership letters. The book also explains the three strategies he used: Generals—buying undervalued securities, Workouts—profiting from merger arbitrage, and Controls—taking majority ownership to influence a company’s direction.
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Warren Buffett and the Interpretation of Financial Statements
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March 2026

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A framework for using Warren Buffett's strategy to read financial statements and find signs of a durable moat. The author was part of Buffett's family and has behind-the-scenes insights into what he focuses on when reading financials. The book breaks down the income statement, balance sheet, and statement of cash flows in clear terms and highlights what to look for in each. It also explains how Buffett values companies using financial statements.
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You Can Be a Stock Market Genius
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June 2023

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Framework book that explains how individual value investors can uncover mispriced opportunities by focusing on overlooked or misunderstood special situations. Greenblatt covers spin-offs, mergers, bankruptcies, restructurings, recapitalizations, warrants, LEAPS, options, and more. Each concept is illustrated through detailed case studies showing how he and other investors applied these strategies to generate market beating returns.
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