Seth A. Klarman is a low-profile value investor and portfolio manager of the investment group, The Baupost Group. The Baupost Group now manages over $7 billion and has delivered returns at over 20% since inception (1983). Seth Klarman is also the author of the book Margin of Safety : Risk-Averse Value Investing Strategies for the Thoughtful Investor, which retails at $1,195 at Amazon.com !
Klarman invests in a wide array of investments ranging from fairly traditional value stocks to more esoteric investments like distressed debt, liquidations, and foreign equities or bonds. Klarman doesn't mind "doing nothing" on occasion. In fact, in 2005 and 2006, nearly half of his portfolio was held in cash. Investing, he cautions, is more than just producing absolute returns. Too often investors focus on that one easy number "return" and ignore the risks incurred to generate that number.
Klarman gave an excellent talk at MIT (here). He talks extensively of how distress events in the financial markets make for a great opportunity to invest profitably. The talk also lays stress on the importance of risk management, use of leverage and protection of capital. Klarman wraps his talk with his understanding of value investing.
No comments:
Post a Comment