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<<As much as I used to look at this, I never made a dime on this supposed "arbitrage" and I wonder if anyone did. Surely there were better ways to occupy my time in early 2009 so I consider looking at the issue a waste of time in retrospect.>>


Making money off the A/B arbitrage was not only plausible, it was fairly easy.

I started playing around with it in '08, and managed to successfully execute the round trip three times, clearing a little less than 1% each time, on average, before the split happened.

IIRC, the rule of thumb I was using back then was, Switch to 'B's when the spread exceeds $1500, and switch back to 'A's when it drops under $500.
I'm not sure I'm remembering that precisely right, but that was the rough idea, as I'm pretty sure I was aiming to clear $1000 per 'A' per round trip, and I found that it really wasn't very hard to do close to that, just by paying a little attention to the ratio.

Since I knew I wanted to hold a high percentage of my assets in Berkshire shares at that point (since I was very confident they were *greatly* undervalued), and was pretty sure that that would hold true for some time, and it was all in non-taxable accounts, this seemed like an easy way to boost my return on those shares while I held them --and it seemed to be working beautifully.
I was quite disappointed when the split happened, since I assumed the increased 'B' liquidity would wipe out the opportunity, and bring that game to an end.

Since then, the discrepancies have definitely shrunk, but certainly haven't disappeared, and there have still been several times when it was very possible to take advantage.
I managed to do it once last year, and posted about it here.

http://boards.fool.com/ab--30499285.aspx
http://boards.fool.com/gap-is-up-to-about-1500-today-3051049...
http://boards.fool.com/looks-like-the-gap-has-almost-complet...

All through all of this, people on this board and elsewhere repeated, whenever the topic came up, that it was impossible --or at least highly impractical-- to try and take advantage of this discrepancy, for various reasons... and I continued to observe that in fact it was quite plausible, and at times downright easy.

It seemed to me a little bit like the Efficient-Markets Theorist who refuses to pick up the hundred-dollar bill he sees on the street, because it couldn't possibly be real, because obviously if it was real, somebody else would've grabbed it before this...

If nobody else wants that bill, I'm happy to pick it up.
Theory be damned.
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