Seth Klarman himself has written one of the most coveted books on value investing, Margin of Safety. The book is out of print,is one of the most stolen books from libraries, and sells for thousands of dollars online.
Seth Klarman is virtually unknown outside value circles, despite his impressive record and value of assets under
management. On average, Klarman’s hedge fund, Baupost has returned 19% p.a. despite holding a large portion of its assets in cash. During the financial crisis, Seth Klarman’s funds lost somewhere between 7% and 13%, certainly outperforming the majority of its hedge fund peer group.
Klarman is a traditional value investor, looking for companies, bonds, credit instruments and real estate opportunities that all trade below what he, and his analysts believe is intrinsic value. However, a margin of safety must be incorporated. Seth Klarman it seems will never chase a stock just because it’s the stock of the moment.
According to a lecture given by Bruce Greenwald: “Warren Buffett says that when he retires, there are three people he would like to manage his money. First is Seth Klarman of the Baupost Group, who you will hear from later in the course. Next is Greg Alexander. The third is Li Lu.”
For more on Seth Klarman, head over to ValueWalk’s Seth Klarman Resource Page, where you can find a detailed rundown of his background, bio, and investment philosophy.
Margin of Safety: Risk-Averse Value Investing Strategies for the Thoughtful Investor by Seth A. Klarman
Security Analysis: Sixth Edition, Foreword by Warren Buffett, Commentary by Seth A. Klarman
Seth Klarman: Recommended books
Benjamin Graham. No description needed here really.
You Can Be A Stock Market Genius
Joel Greenblatt. Greenblatt's book examines catalyst-based investing such as spin-offs, mergers, risk arbitrage, etc. to exploit market inefficiencies.
The Aggressive Conservative Investor.
Martin Whitman. A great guide for learning how to analyze and evaluate stocks.
Book Recommendations by Seth Klarman at the CFA Institute Annual Conference
- The Intelligent Investor
- You Can Be A Stock Market Genius
- The Aggressive Conservative Investor
- The Forgotten Depression: 1921: The Crash That Cured Itself
- Mr. Market Miscalculates: The Bubble Years and Beyond
- The Trouble With Prosperity: A Contrarian’s Tale of Boom, Bust, and Speculation
- Money of the Mind: Borrowing and Lending in America from the Civil War to Michael Milken
- John Adams: Party of One
- Minding Mr. Market: Ten Years on Wall Street With Grant’s Interest Rate Observer
- Bernard M. Baruch: The Adventures of a Wall Street Legend
- Mr. Speaker!: The Life and Times of Thomas B. Reed The Man Who Broke the Filibuster
- When Genius Failed: The Rise and Fall of Long-Term Capital Management
- Buffett: The Making of an American Capitalist
- America’s Bank: The Epic Struggle to Create the Federal Reserve
- The End of Wall Street
- Origins of the Crash: The Great Bubble and Its Undoing
- While America Aged: How Pension Debts Ruined General Motors, Stopped the NYC Subways, Bankrupted San Diego, and Loom as the Next Financial Crisis
- Moneyball: The Art of Winning an Unfair Game
- The Fifth Risk
- Liar’s Poker
- The Money Culture
- The Undoing Project: A Friendship That Changed Our Minds
- The Big Short: Inside the Doomsday Machine
- Flash Boys: A Wall Street Revolt
- Boomerang: Travels in the New Third World
- The Blind Side: Evolution of a Game
- Panic: The Story of Modern Financial Insanity
- Losers
- The Real Price of Everything: Rediscovering the Six Classics of Economics
- Too Big to Fail: Inside the Battle to Save Wall Street
Anything by Jim Grant:
- Bernard M. Baruch: The Adventures of a Wall Street Legend
- Money of the Mind
- Mr. Market Miscalculates: The Bubble Years and Beyond.
- The Forgotten Depression: 1921: The Crash That Cured Itself
- The Trouble With Prosperity: A Contrarian's Tale of Boom, Bust, and Speculation
- Mr. Speaker!: The Life and Times of Thomas B. Reed The Man Who Broke the Filibuster
- Minding Mr. Market: Ten Years on Wall Street With Grant's Interest Rate Observer
- John Adams: Party of One
Anything by Roger Lowenstein:
- Buffett: The Making of an American Capitalist
- When Genius Failed: The Rise and Fall of Long-Term Capital Management. This bestseller is the tale of the collapse of Long Term Capital Management (LTCM) in 1998. The Hedge fund management team consisted of some of the greatest minds of our time.
- The End of Wall Street
- America's Bank: The Epic Struggle to Create the Federal Reserve
- While America Aged An excellent book about the big, and increasing problems of unfunded pension funds in private companies, and the public sector.
- Origins of the Crash: The Great Bubble and Its Undoing Lowenstein's tale of the tech bubble, and the collapse of Enron, and Worldcom.
Moneyball: The Art of Winning an Unfair Game
Michael Lewis' classic. Another Michael Lewis book, The Big Short has also been recommended.
Andrew Ross Sorkin's book about the financial crisis.
- The Real Price of Everything: Rediscovering the Six Classics of Economics
- Losers
- Panic: The Story of Modern Financial Insanity
- The Blind Side: Evolution of a Game
- Boomerang: Travels in the New Third World
- Flash Boys: A Wall Street Revolt
- The Undoing Project: A Friendship That Changed Our Minds
- The Money Culture
- Liar’s Poker
- The Fifth Risk
Disclaimer: This content was not written or authorized by Mr. Klarman.
