Klarman 2017 Letter: Softbank And Sequoia As Symptoms Of The Bubble

Klarman 2017 Letter: Softbank And Sequoia As Symptoms Of The Bubble

– We have some highlights of the Baupost 2017 letter on ValueWalk Premium – since the site just launched we posted here although you really should get our newsletter and check out the other site – also many will ask – also please do not email our staff asking us for copies of the material we are unable to send and therefore will not. Anyway here are links to five articles we have on the topic and with a brief excerpt though on an issue which is not my expertise but seems a bit bubbly – the company known as Softbank and the VC firm known as Sequioa (no relation to SEQUX)

Get The Full Seth Klarman Series in PDF

Get the entire 10-part series on Seth Klarman in PDF. Save it to your desktop, read it on your tablet, or email to your colleagues.

Seth Klarman comments in Baupost 2017 letter to investors the following on the controversial  company.

Capital poured into higher-risk venture investments at an accelerated pace in 2017. Japan's SoftBank, owner of nearly 30% of Alibaba, the Chinese e-commerce company, announced the formation in late 2016 of its $100 billion Vision Fund to make technology investments. SoftBank itself would contribute t0 $28 billion, with the rest coming from other deep pockets, including the sovereign wealth funds of Saudi Arabia and Abu Dhabi, as well as Apple. SoftBank later indicated that a second larger fund was under consideration. Sequoia Capital announced plans to raise a new $5 billion fund, the largest ever assembled by a US venture capital firm. Vast amounts of money relentlessly pouring into high-tech investments inevitably portends the loss of investment discipline in the sector. We have seen this movie before.

Seth Klarman Describes His Approach In Rare Harvard Interview

In a rare interview with Harvard Business School that was published online earlier this month, (it has since been taken down) value investor Seth Klarman spoke at length about his investment process, philosophy and the changes value investors have had to overcome during the past decade. Klarman’s hedge fund, the Boston-based Baupost has one of Read More

Those are Klarman's words as part of his overall bearish worries about the world.

This movie before I would guess refers specifically to the tech bubble of the late 1990s, but could apply to any bubble.

But that is not all: Combine the above with political risk, Chinese debt and the Fed removing the punch-bowl, and? It is time to be cautious, the bears (and Klarman here) would argue

Below readers can find more of our coverage on Baupost 2017 letter

Klarman On


 the danger of Chinese leverage

Discipline while value investing in bubby times

Value investing is not dead

Radicalization of politics

Dangerous FAANG valuations

Do you think Klarman is right about the current market or wrong? Let us know in the comments section!

Updated on

Jacob Wolinsky is the founder of ValueWalk.com, a popular value investing and hedge fund focused investment website. Jacob worked as an equity analyst first at a micro-cap focused private equity firm, followed by a stint at a smid cap focused research shop. Jacob lives with his wife and four kids in Passaic NJ. - Email: jacob(at)www.valuewalk.com - Twitter username: JacobWolinsky - Full Disclosure: I do not purchase any equities anymore to avoid even the appearance of a conflict of interest and because at times I may receive grey areas of insider information. I have a few existing holdings from years ago, but I have sold off most of the equities and now only purchase mutual funds and some ETFs. I also own a few grams of Gold and Silver
Previous article Transporting Commodities With A Fleet Of 36 Precious Ships
Next article Mental Health And Mindfulness [INFOGRAPHIC]

No posts to display