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Chris DeMuth Jr.
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"It's not given to human beings to have such talent that they can just know everything about everything all the time. But it is given to human beings who work hard at it - who look and sift the world for a misplaced bet - that they can occasionally find one." - Charlie Munger I look... More
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  • Where Do You Find Pricing Failures? 59 comments
    Aug 14, 2013 10:56 AM

    Setting aside the capital markets, what in your own experience have you found pricing failures? Not simply bargains, but a complete breakdown in the pricing system's ability to assign even approximately correct values? How often does this seem to happen in your everyday life?

    Stated differently, what is the most overrated or underrated item for sale that you have seen? I am always on the lookout for everyday arbitrage opportunities to exploit mispricing - professionally in the capital markets but always personally wherever I can find them. Any thoughts?

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Comments (59)
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  • johncworth
    , contributor
    Comments (425) | Send Message
     
    Costco closeouts/specials on gift cards. Bought 30 $100 gift cards for a good local restaurant for $19.60 net last year. Was eating great lunches for +- $2.50 all year. Closeouts are rare, but they occur.
    Similarly, I go to Peets Coffee every day, spend $5.70. Bought some Peets $100 gift cards on sale for net $68.60 (including Amex rebate). Over course of a year, I save +- 650, equivalent of $650 after tax income for maybe net 5 minutes of invested time. I recognize that $650 is not a huge amount of money, but the time invested is negligible and I am of a mind to bend over and pick up $650 bucks if it is lying on the sidewalk. (you could of course argue that I could just not go to Peets and save even more, but I like hacks that allow me to live the good life, just more of it)
    14 Aug 2013, 11:11 AM Reply Like
  • Chris DeMuth Jr.
    , contributor
    Comments (4105) | Send Message
     
    Author’s reply » Wonderful. Just wonderful. I love those. Exactly what I was looking for. Also, a healthy mindset to have when approaching the capital markets. Some lunches are not quite $12 good, but almost every lunch I've ever eaten is at least $2.50 good. A nice margin of safety that. My thoughts on gift cards: http://seekingalpha.co...
    14 Aug 2013, 11:21 AM Reply Like
  • Jacob Mohs
    , contributor
    Comments (23) | Send Message
     
    I um know a landlord in a college town that offers fully furnished rooms at great prices. They do furniture ”shopping“ at the end of each semester when top quality furniture is left on the street-corners by students who don't want to bother moving it or posting it on Craigslist. One exception is a luxury antique bookshelf purchased on the last day of a foreclosure garage sale for 5$.
    14 Aug 2013, 12:22 PM Reply Like
  • Chris DeMuth Jr.
    , contributor
    Comments (4105) | Send Message
     
    Author’s reply » Nice. College towns are funded by "third party payers" (parents) which makes them full of price-insensitive actors. Imagine how little class you'd skip if you shelled out $50-100 in cash per lecture whether or not you showed up.
    14 Aug 2013, 12:26 PM Reply Like
  • Brice Mckalip
    , contributor
    Comments (120) | Send Message
     
    Imagine how much I'd have paid if I could have just skipped all the lectures!
    14 Aug 2013, 08:50 PM Reply Like
  • Jonny Edwards
    , contributor
    Comments (49) | Send Message
     
    Senior year of college I ran a little sale off that fact. One problem is that my urban town didn't have enough storage nearby, and not enough students had cars. So we bought these trailers that cost about $400/each including pickup and delivery and parked them on a vacant parking lot over the summer. Then, come Fall time, we sold stuff back and made $800 on each truck. Including labor, we were looking at 30% margins.
    15 Aug 2013, 09:39 PM Reply Like
  • Chris DeMuth Jr.
    , contributor
    Comments (4105) | Send Message
     
    Author’s reply » Perfect. Other than finding opportunities that are increasingly scalable later on, there is little better than the kinds of everyday opportunities available to the young and scrappy.
    15 Aug 2013, 09:45 PM Reply Like
  • Squeeky Wheel
    , contributor
    Comments (310) | Send Message
     
    There's a certain area of Singapore where some of the apartments need a complete renovation, starting with a new ceiling and working down to a new floor and including everything from toilets to walls. Those run about S$900k and need a minimum of S$100k in work. Others have been complete renovated - all the work already done. Those run about S$950k. So as long as you like the renovation you can get S$50k for free. Throw in some free custom furniture and top of the line appliances and you have my house.

     

    So roughly it's half priced construction work plus no pain dealing with construction crews.
    14 Aug 2013, 12:24 PM Reply Like
  • Chris DeMuth Jr.
    , contributor
    Comments (4105) | Send Message
     
    Author’s reply » Excellent. In my experience, high end consumers are very sensitive to having their products done custom to their specific tastes. For tailoring, bespoke is nice, but for most other things, I don't really care at all about whether the stitching is in one color or another if it is in reasonably okay taste. So, you can save a fortune letting someone else pick.
    14 Aug 2013, 12:28 PM Reply Like
  • toddro
    , contributor
    Comments (171) | Send Message
     
    The other day Target was offering a free $5 gift card with the purchase of a $4.99 box of cookies. I bought the cookies, paid cash, collected my gift cards, and then went to the customer service desk and returned the cookies saying I changed my mind and did not want them. As I suspected, they gave me the $4.99/box back in cash and never asked for the gift cards. Rinse, lather, repeat and I have several hundred dollars worth of Target gift cards for free. Try it...
    14 Aug 2013, 12:26 PM Reply Like
  • TimeOnTarget
    , contributor
    Comments (2319) | Send Message
     
    Hi Chris --

     

    I have something of a tool problem. I like them. A lot. Fasteners too. I got sick of having to go to the store every time I needed a fastener, so I started buying them by the box.

     

    If you buy the conventional tool boxes by Snap On, Craftsman, whoever, they cost a decent chunk of change and if you don't buy the highest quality ball bearing ones, the drawer slides are so crappy that they won't open readily when you have them filled.

     

    Anyway, I figured out about 10 years ago that there was a "State Surplus" store in the town I lived in. I also figured out that with everything going digital/electronic they had lots of file cabinets of all types.

     

    So, for my personal paper, magazines, etc. I bought three Steelcase legal lateral file cabinets with the drawers that have the front that you can lift up or pull the whole thing out. I'm not sure they make them anymore--the kind I have--but they used to cost about $1,100 new and I picked up my three for $70, $70, and $80.

     

    For my tools I bought 1 steelcase legal lateral (big, long stuff), a 5 foot tall Wright-Line roller front with open shelves that pull out (I keep some of my fasteners in it--easy access), A 6 foot tall, 11 drawer multi-media (microfilm or microfiche) cabinet --forget who made it--maybe Alpine--but it is SOLID with great bearing slides that I keep my screwdrivers, pliers, drill bits, router bits, and plumbing tools in--I'm betting it cost at least $2,000 new and I got it for $100, two metal library card catalog files--one vertical, a "Monarch" which is really old, really, really well made--incredible slides, and exceedingly heavy, 11 drawers with 2 removable metal boxes per drawer, which I keep various things like braces, brackets, 1-2-3 blocks, pitons, Simpson Strong ties, etc. and the lateral one (And Allsteel, which has 6 removable metal boxes per pullout shelf) I keep the rest of my fasteners in, a Russ Bassett microfiche cabinet (the brand the National Archives use--really well made) which I use for my measuring tools, O-rings, rubber stoppers, etc.. I looked the Russ Bassett up and it retailed for $1,490 when I bought it at the State Surplus store for $50. Anyway, you get the idea. I have two stacks of the regular expensive tool boxes, which really don't hold all that much, and 12 file cabinets that were originally designed as multi-media, card catalog, etc. things,but that actually work better in my opinion.

     

    Anyway, I think these kind of file cabinets are getting phased out by institutions -- State government, school districts, cities, counties, etc. and can be had for cheap. I got mine from the State Surplus store, but I'm sure that they are available in lot of places--used office furniture, etc. I got a ton of truly superior quality storage space for a pittance. I put stuff in the regular tool cabinets that I don't use all that frequently--most of the drawers are too small and flat for my taste. I like my multi-media cabinets better for the tools I frequently access. Highly recommended.

     

    Also, at the State Surplus store, I got 3 fire - resistant safes (one file cabinet type with an S&G combo lock) and two traditional safes. They weighed between 300 and 600 lbs. I got all three of them for $220. They would have retailed for over $3,500 (total). There was one small catch: They were locked and they didn't have the combinations. I figured, always wanted some safes and it would be fun to learn to crack safes--i.e., by manipulating the combination locks. So I got them.

     

    My wife was less than thrilled by this acquisition, particularly when she figured out that they were locked and I didn't have the combo -- this was shortly after we got married, moved into a new house, and were a little cramped for space--particularly in the garage. Actually the words "temper tantrum" come to mind. Fortunately I figured out how to manipulate the combo locks and got them open--which placated her to some degree--until I took up cracking safes as a new hobby and started buying more and more combination locks--oh yeah, I have one file cabinet full of most locks . . . .
    14 Aug 2013, 03:24 PM Reply Like
  • Chris DeMuth Jr.
    , contributor
    Comments (4105) | Send Message
     
    Author’s reply » Awesome, from the interest in tools to the "they used to cost about $1,100 new and I picked up my three for $70, $70, and $80". Super creative. Your wife should know that she is a lucky lady.
    14 Aug 2013, 03:36 PM Reply Like
  • TimeOnTarget
    , contributor
    Comments (2319) | Send Message
     
    That's what I keep telling her, but she doesn't seem to believe me. In fact, she complains about all the "ugly metal file cabinets."

     

    I was promised sole dominion over the garage, but it isn't quite working out that way. That may be good though-- I see a workshop in the future . . . .
    14 Aug 2013, 04:57 PM Reply Like
  • TimeOnTarget
    , contributor
    Comments (2319) | Send Message
     
    Link to one of the ones I have-- really works well for tools.

     

    http://bit.ly/17qbcb7
    14 Aug 2013, 05:16 PM Reply Like
  • Chris DeMuth Jr.
    , contributor
    Comments (4105) | Send Message
     
    Author’s reply » Nice!
    14 Aug 2013, 05:24 PM Reply Like
  • Squeeky Wheel
    , contributor
    Comments (310) | Send Message
     
    Free subway transportation into downtown Singapore as long as you arrive before 7:45am. Lasts for the next *year*. (http://bit.ly/14fYRUK)
    15 Aug 2013, 10:33 AM Reply Like
  • Chris DeMuth Jr.
    , contributor
    Comments (4105) | Send Message
     
    Author’s reply » That is awesome. Better to be out the door by then anyway.
    15 Aug 2013, 10:39 AM Reply Like
  • Jaimini Desai
    , contributor
    Comments (119) | Send Message
     
    Getting rain checks when food products are 50% off. Then, using the rain check when there is a buy 1 get 1 free sale.
    15 Aug 2013, 03:00 PM Reply Like
  • Chris DeMuth Jr.
    , contributor
    Comments (4105) | Send Message
     
    Author’s reply » I love it.
    15 Aug 2013, 03:02 PM Reply Like
  • Meatball Bob
    , contributor
    Comments (36) | Send Message
     
    First one:
    I use points to stay at an older hotel in San Francisco. The hotel has been redesigned to fit modern amenities and as a result one room on each floor is right behind the elevator, and is smaller than the rest. When traveling for business, I don't particularly care about the room. I A) request that room each time and then B) complain about it after my stay. The room always gets comped and I normally get some extra points thrown in as an apology.

     

    Second one:
    Brooks Brothers non-iron slim fit shirts tend to rip in the elbows. Brooks knows it and they'll replace the shirts, no receipt or proof of purchase necessary. I have not had to "purchase" a new BB shirt since 2007.
    15 Aug 2013, 08:15 PM Reply Like
  • steppppo
    , contributor
    Comments (218) | Send Message
     
    Those are not pricing failures. That's called being dishonest. Seriously.
    15 Aug 2013, 10:03 PM Reply Like
  • Chris DeMuth Jr.
    , contributor
    Comments (4105) | Send Message
     
    Author’s reply » Love the first.

     

    I do the second one too.
    15 Aug 2013, 08:35 PM Reply Like
  • Joshua Heller
    , contributor
    Comments (203) | Send Message
     
    I thought about this for 24 hours and didn't really come up with anything... maybe I am not trying hard enough. Some of the ways seem questionable on honesty. I won't say their dishonest, I just wouldn't do them myself.
    15 Aug 2013, 08:50 PM Reply Like
  • Chris DeMuth Jr.
    , contributor
    Comments (4105) | Send Message
     
    Author’s reply » Honesty and arbitrage: I think that one can do this in a way that is robotically honest in every particular. However, by definition one is abusing the heck out of the spirit of the rules while obeying the letter. If one wants free money without a proportionate amount of risk (I do), then there will be someone who is offloading that money without offloading their risk. I appreciate the apprehension. I respect paying one’s way, hard work, and index funds which is what the sensible antithesis of arbitrage looks like.
    15 Aug 2013, 09:03 PM Reply Like
  • Joshua Heller
    , contributor
    Comments (203) | Send Message
     
    I am not the arbiter of good and bad but blatant lying (like the target example) is robotically honest? I am willing to venture that Target had a limit, such as 2 per person or something to that effect. At least go sell them on EBay instead of returning them even if that means selling them at a loss.

     

    Another example of requesting a specific room (near the elevator) and then complaining about it (small room, too much noise, etc?). I am glad at least another poster agrees with me.

     

    I thought there were more bad examples but I guess they were in other posts. I do remember something about complaining on airline flights and getting an automatic/standard refund.

     

    On the other hand there are some great examples such as storing furniture for the summer. Or buying gift cards at closeout.

     

    I am guilty of a few things like sharing an account/subscription (such as a Netflix or WSJ). I'm sure that someone is saying that is dishonest but I do look at it like sharing a newspaper in earlier days... 5,6 people read the paper each day.

     

    Starts to make me question if maybe I shouldn't share accounts anymore.

     

    The other way to look at it is to say that the price is higher for everyone else because of the dishonest use. I know running a small business that we specifically build in an extra cost for fraud.
    16 Aug 2013, 12:05 AM Reply Like
  • Chris DeMuth Jr.
    , contributor
    Comments (4105) | Send Message
     
    Author’s reply » Harsh... and untrue in the case of Target, there was not a limit other than per transaction. Sort of a casual style for a serious accusation, no?
    16 Aug 2013, 07:21 AM Reply Like
  • Squeeky Wheel
    , contributor
    Comments (310) | Send Message
     
    Specifically requesting a product in order to complain about it strikes me as unethical. Were someone to say "I'll take the crappy room for free" then the case is at least honest.

     

    In the Target case I'd just limit the free returns. "Hmmm that's the third set of cookies you've changed your mind on today, how about you go home now?" Not easy for a big store.

     

    Joshua's point is that exploiting an unintended loop hole in the rules makes things more expensive for others (other shoppers or business owners - who granted might be exploiting workers, etc). This creates moral hazard, requires more money be spent on writing rules, and generally reduces efficiency.

     

    " there will be someone who is offloading that money without offloading their risk." Not always or even usually true. There are many cases where economic value and utility value diverge, and one party can take economic value by providing utility value. For example, buying stock during a panic provides piece of mind to the seller (utility) and a good buy to buyer (economic) - the seller is offloading risk, though it's not a good economic choice. In the college furniture case, the students want utility by not carrying stuff so a business man can provide that utility through a profit. Again, risk is transferred. Bargain purchases work that way - one person's utility is more tightly linked to economic gain than another's.
    16 Aug 2013, 08:24 AM Reply Like
  • Chris DeMuth Jr.
    , contributor
    Comments (4105) | Send Message
     
    Author’s reply » Excellent point. I'll happily cede to you that whole last paragraph. Well thought.
    16 Aug 2013, 09:12 AM Reply Like
  • Squeeky Wheel
    , contributor
    Comments (310) | Send Message
     
    I wanted to try to get from where I don't see an ethical issue (person A's utility <> B's utility) to where I do see one. But I couldn't express the point rigorously - still thinking on that one.
    16 Aug 2013, 11:22 AM Reply Like
  • toddro
    , contributor
    Comments (171) | Send Message
     
    There was no limit at Target. After my "test run", I bought 25 boxes at one store and returned them at another store across town. At that store I bought 40 boxes and went back to the original store and returned them. 65 boxes total plus my original 5 "test boxes" = 70 x $5 = $350 in free gift cards. The staff was friendly and accommodating on the returns, and never once even mentioned or asked about the gift cards. The gift cards were not even listed on the receipts. Sorry, but I do not see anything unethical or illegal about buying a product and then returning it. People do it everyday. Geez, women buy clothes by the basketful to go home, try on, wear out on a fancy date, etc. and then return them to do it all over again. Had Target asked for the gift cards, they were in my pocket ready to be handed back, but they did not. That was a pricing failure on their part.
    16 Aug 2013, 08:44 AM Reply Like
  • Joshua Heller
    , contributor
    Comments (203) | Send Message
     
    It sounds like you took advantage of a system issue, one in which it did not scan/post on receipt that you received gift cards. I think it is in a gray area but if you want to be in the 'robatically honest' (something I never heard before until this discussion) then you are ok.

     

    Did you even try one box? Had you tried the cookies before?

     

    I am glad there was no limit, in my haste I came off too critical which was not my intent. Sorry.
    16 Aug 2013, 11:05 AM Reply Like
  • Joshua Heller
    , contributor
    Comments (203) | Send Message
     
    "Geez, women buy clothes by the basketful to go home, try on, wear out on a fancy date, etc. and then return them to do it all over again."

     

    In my personal experience working in retail, I do not agree. Both men and women have similar return profiles. Is this your personal opinion or experience?
    18 Aug 2013, 01:23 PM Reply Like
  • Meatball Bob
    , contributor
    Comments (36) | Send Message
     
    Hmm, I feel the need to defend myself a bit here. If a product is made poorly, and the company is aware that the product is made poorly and they choose to sell it anyway, what should one do? If a hotel chooses to stick one extra room into a space more adequately sized to be a closet, but charges the same rate for it, is their behavior honest? No, they are preying on the costumer who doesn't know any better. Their own employees must find it dishonest too, because they are the ones who race to comp my stay every time I simply mention how small the room is. I think this would all be more challenging if cash were changing hands vs. points, but they seem very willing to toss points around without much trouble at all and I will gladly take them. The "mispricing" exists because large institutional decision makers have different incentives and biases than those on the ground whose primary bias is to avoid confrontation with their customer.
    16 Aug 2013, 10:02 AM Reply Like
  • Joshua Heller
    , contributor
    Comments (203) | Send Message
     
    Did another room go vacant for that night? When you make a specific request for this smaller room, I wonder if otherwise you would have received a room that met your satisfaction.
    16 Aug 2013, 11:09 AM Reply Like
  • Joshua Heller
    , contributor
    Comments (203) | Send Message
     
    I want to apologize if I offended anyone. That was not my intention, although sometimes intentions (and tone) can be hard to understood in text.

     

    It would have just been easier (and clearer) to say in my opinion some of the posts crossed the line. I will reiterate that I am not the arbiter of good and bad and merely offering my opinion only.
    16 Aug 2013, 11:01 AM Reply Like
  • Chris DeMuth Jr.
    , contributor
    Comments (4105) | Send Message
     
    Author’s reply » Thanks for the note.
    16 Aug 2013, 11:03 AM Reply Like
  • Squeeky Wheel
    , contributor
    Comments (310) | Send Message
     
    I'm glad you brought it up. I do think there's a difference between unethical exploitation of a system and ethical exploitation of cheap prices. I'm not sure where that line is (even just for my own opinion), but it's very interesting to consider.

     

    One might consider a historical mis-pricing of financial products. There's a story (not sure if it's total true) that in the early days of option trading someone at one bank mispriced his options. The counter party started buying more and more. Eventually the first guy realized that he was in deep doo doo and had probably just crashed the entire bank with his error. The counter party allowed him to take-back all but the first purchase. The thinking was that the outcome of crashing the bank would have been so severe to the economy and especially to the infant option market, that it wasn't ethical (and maybe not even profitable in the long run).
    16 Aug 2013, 11:33 AM Reply Like
  • Pine Research & Trading
    , contributor
    Comments (164) | Send Message
     
    i bought an apartment for $13k a couple of years ago. of course, real estate was in trouble at the time. these condos had been going north of $200k during 07 or so. they are nice apartments, gated community and golf/tennis/social clubs. in fact, all of the owners were required to belong to one of these clubs at a cost of $10k or more per year.
    as you can imagine, once the price dips below $100k or so, the $10k per year cost becomes nearly unbearable for a potential seller. this forced prices uncomfortably low. to top it all off, the management company began offering a junior membership for about $2400/year. the junior membership was essentially worthless, but it did alleviate the carry. however, the management company did not allow existing owners that option. it was only for new. clearly unfair.
    besides getting me angry, i considered the option of setting up a company that would purchase a unit from an owner to switch to the lower cost membership. then sell it back to them some period of time later, presumably after renting it to them.
    in this case, the arb was caused by a greedy third party.
    why an arb? because rentals were around $1500/month for equivalent places at the time. so the $18k rent was just under the purchase price + hoa + tax + $2400.
    16 Aug 2013, 03:36 PM Reply Like
  • Chris DeMuth Jr.
    , contributor
    Comments (4105) | Send Message
     
    Author’s reply » Interesting.
    16 Aug 2013, 03:46 PM Reply Like
  • Ocean Man
    , contributor
    Comments (537) | Send Message
     
    You know how credit cards now offer a promotional rate, like 0% for 6 months or a year, but you have to pay 3% or so on the transfer to get it? Well, back in the 1998 to 2005 time period, credit card companies were falling over each other to get your debt and there was no 3% fee. You could get 0% for a year with no fee as long as it was on purchases or balance transfers, not cash advances. I was getting at least one new offer per week in the mail.

     

    So what I did was pay all my expenses, mortgage payments, utility bills, car payments, furniture and clothing buys, entertainment, everything on credit cards for a couple of years. I eventually had about $180,000 of credit card debt on about 14 cards, and I had about 35 cards. As one 0% promotional rate would run out, I would roll that balance to one of many offers from the other cards for 0% for another year.

     

    Meanwhile, money market funds were paying north of 5% interest at the time. I was using the ING Orange savings account that was paying me 5.4% interest on the $180,000. So I was making $9,720 risk-free* per year on the deal for several years.

     

    I use the asterisk, because the only downside was that it was slightly harder to get the best rate if you wanted a car loan or home loan / refi if they saw all that credit card debt, but loan underwriting was a joke back then for the most part. I was bummed when this set-up died with the housing crash.
    17 Aug 2013, 12:00 PM Reply Like
  • Chris DeMuth Jr.
    , contributor
    Comments (4105) | Send Message
     
    Author’s reply » Great idea; I used the same introductory 0% APR rate to buy $60k/year of ibonds. After one year, I would sell them all, take the 3-month interest rate penalty for early redemption, and re-pay the credit cards. It took zero capital and had zero risk and got nine months of interest for free.
    17 Aug 2013, 02:09 PM Reply Like
  • Ocean Man
    , contributor
    Comments (537) | Send Message
     
    Nice Chris. At the time I had a photocopy of a page from my Finance 101 college textbook hanging in my office. Highlighted in yellow was the definition of arbitrage. Highlighted in blue, slightly further down the page, was a sentence that said arbitrage does not exist in efficient markets.
    17 Aug 2013, 05:06 PM Reply Like
  • Joshua Heller
    , contributor
    Comments (203) | Send Message
     
    I did this too, but being in college at the time, I did not have nearly as large of a credit line that I would have liked to take advantage.
    18 Aug 2013, 01:17 PM Reply Like
  • welby
    , contributor
    Comments (25) | Send Message
     
    My 84 year old mom goes to the grocery store, buys a product that's on a two for one sale, say frozen tilapia for$ 9.99. The store's policy is if we overcharge you, the item is free. She checks her receipt and when she finds the tilapia charges for 9.99 (twice) she tells the cashier. The cashier says you're right, we'll give you your 9.99 back. Mom says no, they are both free according to your store policy. And she waits until they credit her 19.98.

     

    She cooks them, we enjoy dinner, she tells me the story and ends with "I made a killing today".
    17 Aug 2013, 05:08 PM Reply Like
  • Chris DeMuth Jr.
    , contributor
    Comments (4105) | Send Message
     
    Author’s reply » Welby,

     

    Please send me her CV!
    17 Aug 2013, 07:35 PM Reply Like
  • toddro
    , contributor
    Comments (171) | Send Message
     
    Ocean Man reminds of 2009 when the US Mint was selling presidential and Native American $1 coins for face value and offering FREE shipping. I would buy boatloads of the coins and pay for them on a credit card that offered frequent flier reward miles. When the coins arrived, I would take them to the bank and deposit them and then pay my credit card bill online the next day. I think I am still flying on those miles... The only drawback was those boxes of 250 coins were heavy when you were loading 2 to 4 dozen at a time in the trunk of your car!
    17 Aug 2013, 10:49 PM Reply Like
  • Chris DeMuth Jr.
    , contributor
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    Author’s reply » I love 'em (good for paying for chores because kids love them too).
    18 Aug 2013, 08:41 AM Reply Like
  • toddro
    , contributor
    Comments (171) | Send Message
     
    I never even saw them - never even opened the boxes...
    18 Aug 2013, 12:52 PM Reply Like
  • Joshua Heller
    , contributor
    Comments (203) | Send Message
     
    One other point that might be missed is that someone making an 'unnecessary' complaint causes others who have legitimate complaints to get less compensation then they deserve. (The same could be said for 'unnecessary' returns)

     

    For example, I have a friend whose flight was canceled because the pilots did not show up for the flight. Because the airline was unable to get them on a flight until the next day, he missed his sisters wedding. Fortunately, he did make it in time for the celebration at least. The airline gave him very little compensation (at least from his perspective and from my perspective). I realize of course that my friend has some blame as he could have traveled 48 hours before vs 24 hours in advance of the wedding.
    18 Aug 2013, 01:26 PM Reply Like
  • Ba1k3es
    , contributor
    Comments (507) | Send Message
     
    I agree with Joshua and others that many of these are unethical or borderline unethical. Arbitrage is taking advantage of price differences in different markets, not abusing systems.

     

    Requesting a room and then complaining to get it for free is unethical and abuse. It is not "buying in one market and selling in another." The justification that the hotel is being unethical by charging unsuspecting guests full price for a subpar room is no justification at all. If we all derived moral code from the least moral, we would all be rapist and killers. As my mother constantly reminded me, "Two wrongs do not make a right."

     

    Just because no one catches you, or you haven't broken any laws does not mean an action is ethical. It is this same attitude of why we have to have laws or bodies like the EPA. Because people took advantage at the detriment of others. Instead money has to be spent privately or publicly regulating and protecting against those that take abuse the systems instead of more productive means.

     

    Of all the ones I read I think the gift cards and credit cards were the only ideas that really constituted pricing breakdowns or arbitrage opportunities.
    18 Aug 2013, 05:58 PM Reply Like
  • adawg304
    , contributor
    Comments (41) | Send Message
     
    Interesting discussion. Not sure I really follow the tilapia arb.
    19 Aug 2013, 01:29 AM Reply Like
  • Pine Research & Trading
    , contributor
    Comments (164) | Send Message
     
    not sure everyone would consider it an "arb" strictly, but it does save me quite a bit: the library.

     

    i am able to get resources from multiple, world class systems. i can request books throughout my local system and get it delivered to my local library. this includes books (of course) and audiobooks. in addition, i am able to download both audio and e-books. i still buy books, but my purchase of audiobooks has gone to zero because i am able to continually find interesting titles. (audiobooks btw are doubly good because they transform tedious time in the car to enjoyable and educational time).

     

    this may not be as good for everyone, but if you are in the greater nyc area it works. there are also online database subscriptions and even museum passes.

     

    i've excluded movies because it is not nearly as good a service since many times the dvd's are scratched and we often get dinged bringing them in late.

     

    i know. little hokey. but it has saved me quite a bit.
    19 Aug 2013, 03:10 PM Reply Like
  • Chris DeMuth Jr.
    , contributor
    Comments (4105) | Send Message
     
    Author’s reply » Great post (but I am a little hokey too). More hokiness: I spend an extremely high percentage of my life in libraries. The percentage is even larger when one adds in all of the free but valuable to me things that I do. I am very selfish with my time and only do things that are priorities to me. Much of what I do would be identical if I were a billionaire or penniless. You're never too poor to go to the library and become expert in some new field (the "you're never too poor to..." list is a long one including split wood, clean up one's quarters, go for a long run, swim across the lake, re-read Benjamin Graham). I guess the obvious corollary is that you're never too rich either when it comes to getting joy and edification from such free, available resources.
    19 Aug 2013, 03:24 PM Reply Like
  • Pine Research & Trading
    , contributor
    Comments (164) | Send Message
     
    i am an education junkie. both that i like to educate myself (and the idea of educating myself) and i am intrigued by the current state of education (moocs and some research topics). btw, you could put down free moocs as an arb, too. i took a great course at coursera on computational finance. that's probably a topic on its own.

     

    well, i can tell you one thing for sure that would not be identical if i were a billionaire. and that is, i'd be doing a lot more global warm water surfing! don't need high end; i just care about the water being warm and the waves being about chest high and consistent.

     

    admittedly, some (like 99%) of the surfing issue is related to parental responsibilities. but they make up for it (mostly :) ). they are even starting to surf with me which is off the charts.
    19 Aug 2013, 03:42 PM Reply Like
  • Chris DeMuth Jr.
    , contributor
    Comments (4105) | Send Message
     
    Author’s reply » Moocs are a great thing; both for society and for me. MIT will be rolling out many more shortly.

     

    Another worth an afternoon: Orvis was offering $50 gift certificates with a free fly fishing class. Took a half dozen family members with me, enjoyed the class, pooled the certificates, and shared the Helios fly fishing outfit that we purchased with the certificates. The Helios 2 had just come out, so the older version was down from $925 to $649. We walked out with new skills and a new rod.
    19 Aug 2013, 03:58 PM Reply Like
  • sheldond
    , contributor
    Comments (1086) | Send Message
     
    Chris and Pine,

     

    Some good ideas there. Since I have a number of relatively expensive university degrees. One of my hobbies is looking at the book list and course requirements from a great school with a good program ie. Columbia or Wharton and then reading through all of the books that someone with that degree would have. Doing the research but not having to turn in papers on a deadline.....priceless.

     

    I know it is not the same as a mooc or having access to a cohort of classmates and professors or actually attending Wharton but I find a great value in learning from the great texts and from the primary sources. Sometimes I prefer it to the slants of the professors anyway and it sure beats continuing to pay ungodly tuition so someone else can give me accreditation...Please...

     

    That being said I was already hoodwinked into paying for many degrees and the experience prepared me well for independent scholasticism. It is obviously not for everyone and our society is far from the days where you can pull an Abraham Lincoln and teach yourself the law and have others accept it as valid.

     

    Truthfully, I think this is a shame and education has become a big con game in terms of the actual value of many degree programs. Knowledge doesn't usually come from Universities....it is merely regurgitated there.

     

    Best,

     

    D
    19 Aug 2013, 05:59 PM Reply Like
  • Chris DeMuth Jr.
    , contributor
    Comments (4105) | Send Message
     
    Author’s reply » Great comments; thanks.
    19 Aug 2013, 06:38 PM Reply Like
  • arbtrader
    , contributor
    Comments (176) | Send Message
     
    The best online deal site I have found....

     

    (and I don't shop, ever. I go to the mall maybe every 18 months with a child dragging me in and using free valet parking for my 12 year old Lexus, sponsored by the local dealership)

     

    ....is http://www.dealnews.com the selections are edited and you can sort by category, 'hotness' or theme. I'm incapable of paying retail for anything and they take the time/labor to scan the web to find discounts and deal codes and occasionally, free items. (I got a 3$ app, free, via an apple store daily markdown last week)

     

    They tell you how much the discount is, shipping costs, the last 'low' price and when it was offered- a great tool to see if you are getting a regular sale or a 'whip out the credit card, now' deal.

     

    The other day I scored some high end outdoor gear at REI for 50% off the sale price in a closeout. Patagonia is nice, but not at retail prices!

     

    This is not technically an 'arb' as I don't intend to re-sell what is purchased but I suppose you could on E bay.

     

    Great commentary above. Thanks!
    19 Aug 2013, 05:45 PM Reply Like
  • Chris DeMuth Jr.
    , contributor
    Comments (4105) | Send Message
     
    Author’s reply » Thanks for the tip!
    19 Aug 2013, 05:48 PM Reply Like
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