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." Continue Reading »