The arbitrage mindset

One skill that  I feel that it’s important to develop in order to become a great investor is what I call the arbitrage mindset.

The definition of “arbitrage” according to Merriam-Webster is:

[munger]

“The nearly simultaneous purchase and sale of securities or foreign exchange in different markets in order to profit from price discrepancies.”

The traditional example is an arbitrage between the price of gold in New York and London.  (For this example, we will ignore commissions, fees and exchange rates.) Say gold is trading at $1,275...