Dear Baupost Fund Shareholder,. We are pleased to report a gain . of all dividends. m arketfolly. Click here to read more hedge fund letters at MarketFolly. com. Seth Klarman Shareholder Letter March 4, at am by. I found some great excerpt from Seth Klarman’s Annual Letter (H/T to. During the financial crisis, Seth Klarman’s funds lost somewhere between 7% and . Letters – · My Favorite Quote from Baupost’s Annual Letter.

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Bonds will have make wholes where issuer needs to pay you for the missed interest payments if they take you out early.

Seth Klarman Shareholder Letter 2010

While some of the investment specific information is obviously dated, the wisdom Klarman shares on how to evaluate markets is timeless. Operations not meeting these requirements are speculative.

Indeed, Klarman has made multiple references to the short-term nature of the fund management industry, how many investment managers have become fixated on short-term performance, increasing levels of speculation as they rush to catch market moves. The business climate is more volatile now. Very curious to know whick bk equities youre invested in. Therefore, an investor should put money to work amidst the throes of a bear market, appreciating that things will likely get worse before they get better.

For the bauposh year ending October 27Baupost posted a return of The fact of the matter is that buying a well followed, well covered large cap stock as an individual investor that may look cheap in an overbought market could produce good relative returns i.

Baulost the worst case is a total loss, but this is only 50 points. Doesn’t a lower bond price mean a worse credit?

Short clips of market movements push the culture that investment decisions can be made in under a minute.

The Wizard of Lies. Rule Capital Structure Arbitrage: In his preface to Security Analysis: Market is there to serve you, not to guide you. First is Seth Klarman of the Baupost Group, who you will hear from later in the course.


Seth Klarman Resource Page

Sixth EditionSeth Klarman notes how the coverage of financial markets on dedicated news networks, ferments the view that investors should have a view on everything the market is doing, and that they should be aware of every market baupst. Further, if you had to look at a the hedge fund’s universe of analysis of financials: In this environment, the chaos is so extreme, the panic selling so urgent, that there is almost no possibility that sellers are acting on superior information.

I also “riding the tide” as it were as many funds cannot invest in small bankrupt companies they can’t get any substantial size to move the needle and many people shrug these investments off. Third is Li Lu.

Also, do you dig into the level of looking at how their reserves trend and comparing it to competitors? But still, valuable and rare commentary from the legendary investor. Indeed, in situation after situation, it seems clear that fundamentals do lteter factor into their decision making at all. Why, if distressed debt is such an attractive arena, didn’t many more funds sprout up to take advantage of the excess returns there?

In short, even the best trained investors would make the same mistakes investors have been making forever, and for the same immutable reason — that they cannot help it. Could you elaborate on the statement “I also think the insurance industry is one of the most bauposst industries out there. All data, information and opinions are subject to change without notice.

Collection of Seth Klarman’s Baupost Group Letters: MUST READ ~ market folly

I replied that there were indeed very capable competitors in this space, but that opportunities in distressed debt ebb and flow with economic cycles. Ex the coupon, the upside downside is then 45 points up, 95 points down: People would still find it tempting to day trade and perform technical analysis on stocks. While it is always tempting to try to time the market and wait for the bottom to be reached as if it would be obvious when it arrivedsuch a strategy has proven over the years to be deeply flawed.


Whether or not this view is correct is up for debate. The availability of information has also reduced the amount of mispriced securities there are available in the market place. However, a margin of safety must be incorporated.

Subscribe Subscribe in a Reader. Historically, little volume transacts at the bottom or on the way back up, and competition from other buyers will be much greater when the markets settle down and the economy begins to recover.

They are unable to sit on their hands, fearing that their businesses would wither and their people would depart. A country of security analysts would still overreact.

If anual do not have a sound process, you can freeze, or worse, get short, just went the opportunity set is at its ripest. Letfer the market started to fall, Klarman profited. As I’ve mentioned a few times on the blog before, this is the industry I am most confident in my ability to analyze with the deepest set of connections across the industry’s supply chain brokers, producers, adjusters as well as management teams.

Never Miss A Story! Could you recommend funds which offer letters like the big HW’s at Oaktree? For instance, Station is in the market bauplst trying to clear a bond deal in the 60s. Klarman learnt his trade by reading the teachings of Graham and Dodd but over the years his strategy has changed.

Subscribe to ValueWalk Newsletter. Petter it falls in half, do you reinvest dividends? I’m interested if that number is a function of your hurdle rate and position size rules, intuition, or whatever. I read and do a quick analysis on every public company that files for bankruptcy.

Email hunter [at] distressed-debt-investing [dot] com.