"Arbitrage, traditionally understood to mean exploiting different prices for the same thing on two different markets, for Buffett describes the use of cash to take short-term positions in a few opportunities that have been publicly announced. It exploits different prices for the same thing at different times. **Deciding whether to employ cash this way requires evaluating four commonsense questions based on information rather than rumor: the probability of the event occurring, the time the funds will be tied up, the opportunity cost, and the downside if the event does not occur.**" ([Location 392](https://readwise.io/to_kindle?action=open&asin=B01J2SLA5O&location=392)) *** **Tags** — [[quotes]], **See Also** -- [[Warren Buffett]], [[Charlie Munger]] **Source** — [[202308141129 — B — The Essays of Warren Buffett]]