And He Earned A Profit!

But what was the deal?

The confusion starts when he he buys same horse again. But if we look at it as two different transactions then it pretty straightforward.

At first he buys horse for $60 & sells it for $70. Here, he makes profit of $10. This is one transaction.

In next transaction, he buys same horse for $80 & sell the same for $90. Again, here he makes profit of $10.

In this way, the total profit he earns from these transactions is of $20.