Seth Klarman ( Baupost Group )

[winston]

The Smart Money: Seth Klarman

Source: Roy Luck via Flickr (Modified)
Plays to Focus On: Cheniere Energy, EMC, Allergan

Other than Warren Buffett — who has achieved something close to demigod status — perhaps no other investor has quite the cult following of Baupost Group’s Seth Klarman. Value investors are willing to do back-alley deals with men in trenchcoats to get a copy of his out-of-print book, Margin of Safety. He’s just that good.

That said, Klarman has made a few moves recently that have raised a few eyebrows. Klarman bet big on energy, at one point having nearly 20% of his portfolio in liquefied natural gas exporter Cheniere Energy (LNG). Well, Klarman bought even more Cheniere last quarter, and he now owns nearly 13% of the entire company.

Yet Cheniere is no longer Klarman’s biggest holding. After a buying spree in the first quarter, that distinction now belongs to big data player EMC Corp (EMC). EMC now makes up slightly more than 20% of Klarman’s portfolio.

Klarman also made an interesting new buy in beaten-up biotech Allergan PLC (AGN), a favorite holding of fellow money masters Daniel Loen, John Paulson, Leon Cooperman and David Einhorn, among others. Allergan makes up about 7% of the portfolio.

Source: Investor Place

[winston]

5 Lessons From Seth Klarman

By Rupert Hargreaves

The founder of Baupost Group, the $27 billion hedge fund has achieved stellar returns for investors over his career, with Business Insider reporting that since 1983, Klarman has made his investors net gains of $22.6 billion.

In percentage terms, on average Baupost has returned 19% p.a., even though the fund tends to have a large cash allocation.

To truly exploit financial market inefficiencies, investors must do two things:-
1) they need to be patient and wait for the right opportunity before committing themselves;
2) the need to invest with a long-term time horizon and not be swayed by short-term market fluctuations.

By buying a share in a business, you are becoming an owner of that business and therefore, you should act as a business owner. Business owners do not check the value of their business every five minutes and do not rush to sell at the first sign of trouble.

The margin of safety is perhaps the most important element in value investing, but is all too often overlooked by investors looking to make a quick buck and not doing their research properly.

Klarman is always looking to use the most conservative set of numbers available.

He is never overly optimistic and is always doubtful that a high-growth company can meet lofty expansion targets.

Furthermore, Klarman is never willing to rush into something to make a quick buck. Everything is analyzed, discounted and approached in a controlled manner.

He always keeps a substantial cash buffer (20% or more) to take advantage of any opportunities that may arise and only invests where there is a wide margin of safety to an already discounted intrinsic value.

Source: Guru Focus

http://www.thetradingreport.com/2016/08 ... h-klarman/

[winston]

Value Investing: It is one of the hardest things to do and that is to remain a disciplined, long-term investor at all times.

“If the entire country became securities analysts, memorized Benjamin Graham’s Intelligent Investor and regularly attend- ed Warren Buffett’s annual shareholder meetings, most people would, nevertheless, find themselves irresistibly drawn to hot initial public offerings, momentum strategies and investment fads.

People would still find it tempting to day-trade and perform technical analysis of stock charts.

A country of security analysts would still overreact.

In short, even the best-trained investors would make the same mistakes that investors have been making forever, and for the same immutable reason — that they cannot help it.”

- Seth Klarman

[winston]

Iconic hedge fund manager Seth Klarman says investors are missing huge risks

by Rachael Levy

"When share prices are low, as they were in the fall of 2008 into early 2009, actual risk is usually quite muted while perception of risk is very high," Klarman wrote.

"By contrast, when securities prices are high, as they are today, the perception of risk is muted, but the risks to investors are quite elevated."

In Klarman's more recent letter, he flagged three forces that investors are regularly combatting:

1. Greed and fear, which "pressure investors to do the wrong thing at every turn."

2. "Aggressive brokers, investment bankers, and traders who routinely promise more than they can deliver."

3. Investors focusing on the short term and trend following, and restrictions that are supposed to limit risk but prevent outperformance.

Source: Business Insider

https://finance.yahoo.com/news/iconic-h ... 10088.html

[winston]

BAUPOST'S KLARMAN: Investors are asking the wrong question about the stock market

by Rachael Levy

Baupost's Seth Klarman, one of Wall Street's most respected investors, says investors are asking "Why sell?" when really they should be asking "How can I afford not to?"

He made the comments in a private letter to clients as the stock market continues to rage on to historic highs.

Baupost is holding roughly 40% of its assets in cash and is returning $2 billion to investors at year end, according to a person familiar with the firm.

The firm's funds made almost no money in the third quarter of this year, but are up about 3% on the year, according to the person familiar with the matter.

The firm took a 12% loss on Qualcomm, a multinational semiconductor and telecommunications equipment company.

Source: Yahoo Finance

https://finance.yahoo.com/news/baupost- ... 13940.html

[winston]

Kass: When the Oracle of Boston Speaks, We Should Listen Closely

Seth Klarman is one of the top-five investors in modern investment history -- in the class of Buffett and Druckenmiller.

By DOUG KASS

"You may find a buyer at a higher price-a greater fool-or you may not, in which case you yourself are the greater fool."
-- Seth Klarman

Source: Real Money

https://realmoney.thestreet.com/investi ... yptr=yahoo

[behappyalways]

7. "Getting your capital back and trying to make a return — if I had to choose one of those, I'd always choose getting your capital back because you live to play another day. Losing money is a real challenge because it can be very, very hard to make it back. You always want to be thinking about not blowing up, not getting too far over your skis." (Funds that incur large losses often suffer further headaches in the form of client redemptions, higher employee turnover, recruitment challenges, and margin calls, Klarman said.)

Value investor Seth Klarman explains how he finds bargains, prepares for a bear market, and limits his losses in a new interview. Here are the 12 best quotes.
https://markets.businessinsider.com/new ... ent-2022-6

[winston]

Billionaire Seth Klarman Says the ‘Everything Bubble’ Might Pop Soon, but Stays Heavily Invested in These 2 Stocks

You had a bubble, it was really a credit bubble, that became an everything bubble.

The bubble did a “pretty good job of collapsing” last year but warns that there could be more carnage on the way.

“We haven’t seen a lot of bodies float up,” added the hedge fund boss ominously. “I don’t know what that means. But I’d be worried.”

Source: TipRanks

https://finance.yahoo.com/news/billiona ... 49429.html