Seth Klarman

Seth Klarman

Last Update: 05-13-2016

Number of Stocks: 33
Number of New Stocks: 5

Total Value: $6,865 Mil
Q/Q Turnover: 24%

Countries: USA
Details: Top Buys | Top Sales | Top Holdings  Embed:

Seth Klarman Watch

  • How McDonald’s Generated a 15.6% CAGR Over 2.1 Years

    McDonald’s (NYSE:MCD) has been a great investment for a very long time.


    One dollar invested in McDonald’s stock in 2014 would be worth $606.67 by the end of 2015 (including dividends). That’s an annualized return of 14.9% a year.

      


  • On Psychology and Investing: Part 1 – Behavioral Finance

    On Psychology and Investing: Part I - Behavioral Finance


    As investors, we believe successful investing only relies on gathering data, filtering information and properly analyzing value. The part glossed over is the fact that we're human beings, and  emotion tends to play as big a role in success, or failure, as any other factor. In this article, which will be part one of a three-part series detailing how much psychology affects our investing decisions, I'll introduce the concept of behavioral finance and explain why it matters to investors.

      


  • Seth Klarman Nearly Doubles Stake in Twenty-First Century Fox

    Value investor Seth Klarman (Trades, Portfolio) boosted his stake in Twenty-First Century Fox Inc. (NASDAQ:FOXA) during the first quarter, adding 3,599,422 shares of the company at an average price of $26.74. Klarman now owns 7,696,922 shares of Twenty-First Century Fox.


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  • Seth Klarman's 5 New Buys

    Seth Klarman (Trades, Portfolio), a deep value investor, purchased five new positions in the first quarter, his portfolio update showed Friday.


    Tech stocks make up the greatest portfolio of Klarman’s portfolio at 36%. The next largest is energy at 27.9%. In total he owned 33 positions at the end of the first quarter with a value of $6.9 billion. Klarman has also been heralded as the fourth most profitable hedge fund manager ever by LCH Investments.

      


  • The 3 Most Important Words in Investing

    On Margin of Safety


    Margin of Safety, a concept put forth by Benjamin Graham, has been central to the value investing philosophy for quite a while now. So much so the great Warren Buffett (Trades, Portfolio) said margin of safety may be the most important words in investing. So what exactly does the phrase mean and how can you use the idea to your advantage as an individual investor?

      


  • Tweedy Browne Global Value Invests in Bank of New York Mellon

    Tweedy Browne Company LLC, a successor to Tweedy & Co., was first established by Forrest Birchard Tweedy in 1920 as a dealer in closely held and inactively traded securities. The firm’s 96-year history is grounded in undervalued securities, first as a market maker, then as an investor and investment advisor. The firm takes a value investing approach that focuses on long term investments very similar to Joel Greenblatt (Trades, Portfolio), Seth Klarman (Trades, Portfolio) and the founder of value investing Benjamin Graham.


    During the first quarter, the Tweedy Browne (Trades, Portfolio) Global Value Fund purchased 1,315,780 shares of Bank of New York Mellon Corp. (NYSE:BK).

      


  • On Value Investing

    What is value investing? What does it mean? How do you use it as a strategy? And most importantly, does it work? Consider this your entry to – or rediscovery of – the wonderful world of value investing.


    Talking points

      


  • David Abrams Raises Stake in Barnes & Noble Education

    Guru David Abrams (Trades, Portfolio) added 9,544 shares to his stake in Barnes & Noble Education Inc. (NYSE:BNED) on April 8.


    Barnes & Noble Education, an independent public company and part of the Barnes & Noble (BN) family of businesses until its separation in 2015, is one of the largest contract operators of bookstores on college and university campuses across the U.S. and a leading provider of digital education services. The company creates and operates campus stores that are focal points for college life and learning, enhancing the educational mission of the institution, enlivening campus culture and delivering an important revenue stream to Barnes & Noble's partner schools.

      


  • 10 Extraordinary Traits

    I never heard of Mark Sellers until I came across his speech to Harvard MBAs incidentally. I think this is a great read. Here is the link to the speech:


    Sellers talked about how hard it is to be a great investor, and the chance is less than 2% for a Harvard MBA and 1/50th of 1% for a non-Harvard MBA. While I don’t fully agree that a Harvard MBA is 200 times more likely to be a great investor than a non-Harvard graduate, I am with Sellers regarding the common traits of great investors.

      


  • Seth Klarman Profits From Biotie Therapies Buyout

    Seth Klarman (Trades, Portfolio)’s 2015 investment in pharmaceutical company Biotie Therapies Corp. (NASDAQ:BITI) paid off this week when the company was bought out at a premium.


    The founder of investment adviser Baupost Group held 2,158,889 shares of the company after increasing the position by 54.8% Jan. 19, giving him about 11.4% of its total shares. He disclosed the increase the same day Acorda Therapeutics Inc. (NASDAQ:ACOR), a developer of treatments for neurological disorders, announced a tender offer to acquire all of the company’s existing common stock, American Depository Shares, options and warrants.

      


  • Klarman: Risk Is Both Probability, Potential Amount of Loss

    It is well-known that for value investors, risk is not standard deviation stemming from prices. Rather, it is the product of the expected loss times the probability of that loss occuring. One of the best efforts in defining risk that I have encountered comes from Seth Klarman (Trades, Portfolio), who, in one of his investor letters, provided a detailed explanation on how he thinks and acts upon this definition of risk. 


    “The risk of an investment is described by both the probability and the potential amount of loss. The risk of an investment—the probability of an adverse outcome—is partly inherent in its very nature. A dollar spent on biotechnology research is a riskier investment than a dollar used to purchase utility equipment. The former has both a greater probability of loss and a greater percentage of the investment at stake.
      



  • Seth Klarman Slashes Bellatrix Exploration Holding

    Guru Seth Klarman (Trades, Portfolio) attended Cornell University where he graduated with a bachelor's in 1979, and went on to graduate with an MBA from Harvard in 1982. Klarman founded The Baupost Group in 1982, an investment firm that focuses on long term value with similar investment philosophies to the legendary Benjamin Graham. 


    In the first quarter of 2016, Klarman slashed 15,337,219 shares of Bellatrix Exploration Ltd. (NYSE:BXE) from his portfolio, reducing his holding by 63.93%. Klarman now owns 8,653,281 shares of the company.

      


  • Seth Klarman Is Betting Big on Energy

    According to his latest fillings, Seth Klarman (Trades, Portfolio)’s exposure to the energy sector has never been higher. Three of his top five holders are in the oil and gas space. Here’s a quick primer on his biggest bets.


      


  • How Seth Klarman Decides the Right Time to Sell

    Seth Klarman (Trades, Portfolio) gave an interview directly from the Baupost headquarters for the Ben Graham Center for Value Investing in 2009. As you recall, during that time Baupost was openly active and buying assets when most funds were overly pessimistic about the environment. While I certainly recommend you to go through the whole interview, one of the most interesting comments stemmed from the question: How do you decide when to sell something?


    "We never hold on for the last nickel. I think you do a big mistake when you do that. First of all, we never assume something will go past its fair value. A lot of times people will fall in love with something and buy stock at 10 and think it's worth 20, but it's acting so well when it hits 20, that they hold on until 25 and it's no longer value at all. Not that you shouldn't re-assess if you decide it really has added-value, that this is better than I thought, that retained earnings bring the value higher, that's ok, but to just go along with it because it acts well is irresponsible."

      


  • The Biggest Fear as an Investor

    Seth Klarman (Trades, Portfolio) was once asked what his biggest fear was as an investor. Here is what he said:


    “For years, when someone asked me what my biggest fear was as an investor in managing my portfolio, my answer was that it was buying too soon on the way down from often very overvalued levels. I knew a market collapse was possible. And sometimes, I imagined that I was back in the 1930s after the market had peaked the year before and then dropped 30%. Surely, there would’ve been some tempting bargains then. And just as surely, you’d have been crushed by the market’s subsequent plunge over the next three years – down to below 20% of 1929 levels. A fall from 70 to 20, and from 100 to 20, would feel almost exactly the same by the time you hit 20. Sometimes being too early becomes indistinguishable from being wrong.

      


  • Mattress, Roulette or Somewhere in Between: Investing With a Margin of Safety

    Does more risk equal more return?


    Conventional investment advice suggests that high returns are only achieved when taking high risks. This makes sense to some degree.

      


  • Seth Klarman on the Best Way to Learn - Practice

    After reading an article by Roger Lowenstein defending the efficient market hypothesis, Seth Klarman (Trades, Portfolio) wrote an article in which he provided arguments in favor of value investing and the obvious market inefficiencies ("A Response to Lowenstein’s Searching for Rational Investors in a Perfect Storm," Journal of Corporation Law, 2005).


    In the article, Klarman provided a strong argument about two things: the importance of practice against theories and the relevance of observing and reaching common-sense conclusions.

      


  • Seth Klarman and How to React to a Market Downturn

    During 2009, The Outstanding Investor Digest interviewed Seth Klarman (Trades, Portfolio) on his views after the subprime bubble burst. Some of the comments made by Klarman remain as relevant today as in those days. Here are some of the best excerpts from the interview:


      


  • Seth Klarman on the Disruptive Forces of Technology

    In his most recent annual letter to Baupost's shareholders, Seth Klarman (Trades, Portfolio) discussed his views on how flexible investors' approach should be and the potential that technology has to transform investing and research.


    Klarman also mentioned that no industry is safe from a transformation due to the big technological changes we face.

      


  • Buffett-Like Investor Allan Mecham on Making Mistakes

    With the inevitable comparisons to Warren Buffett (Trades, Portfolio), Arlington Value Capital's manager, Allan Mecham, has released his annual letter to investors. His 7.5-year annualized return is now 30.9% against the 8.7% generated by the S&P 500. However, this was the first year in over seven years in which the fund has registered a loss. I found it very interesting and peculiar the way Mecham approached and discussed the negative year.


    "Unfortunately, part of our poor performance in 2015 can't be attributed to a manic "Mr. Market" as it reflects mistakes I made. The poor results do not stem from a bevy of blunders; rather, my discipline slipped and execution suffered."

      


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