Sorry about this.
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User Comments:
1. Jetjam says on Nov 06, 2009 at 1:08 PM:
David, you sure have your finger on the Klarman pulse huh? Thank you very much for the excellent posts!
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2. Silverpill23 says on Nov 06, 2009 at 1:53 PM:
Thanks for the post.
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3. Tkervin says on Nov 06, 2009 at 2:00 PM:
Thank you very much for the report. Would have loved to be there......
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6. BBH says on Nov 06, 2009 at 8:19 PM:
Good report.
I have two questions for the experts -
1) What is the best way to short treasuries ?
2) How can common investor hedge using CDS? what proportion of asset should be used for hedging?
Thanks
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7. Value_barbarossa says on Nov 06, 2009 at 11:25 PM:
I'd love to read that article, but sadly I stumbled across the thread too late. Anyone (author?) mind e-mailing me the piece?
valuebarbarossa@gmail.com
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8. Jinraidx says on Nov 07, 2009 at 1:21 AM:
same as barbarossa , i would like to kindly request a copy of the meeting letter
my email is jinrai_dx@hotmail.com
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9. Max7777 says on Nov 07, 2009 at 3:27 AM:
Can I also get a copy of this letter or can anyone please tell us what was in the letter..
my email is taleshi7777@yahoo.com
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10. Dusuk4 says on Nov 07, 2009 at 4:03 AM:
Are there anyones who are kind to send me the report via email as I aspire/love to read and think about Mr Klarman's letter. My email address is
dongupsuk@hanmail.net
Thank you for your kindness in advance.
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11. Mycj8144 says on Nov 07, 2009 at 6:31 AM:
really appreciate if anyone can share a copy of the meeting notes: mycj8144@gmail.com
Thanks so much
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12. Goo says on Nov 07, 2009 at 9:46 AM:
I would deeply appreciate to receive a copy of these precious notes !
goo-nad@hotmail.com
Thanks!
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13. Tkervin says on Nov 07, 2009 at 11:00 AM:
If it would not be too much trouble. thomaskervin@mac.com Thanks!
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14. Fk says on Nov 07, 2009 at 11:59 AM:
Several people sent me private messages asking if I had saved a copy of this message, so I'm just going to reply here: Sorry, I did not. I looked through my browser cache to see if I could find a copy, again, no luck. sorry.
Hopefully the author David will be moved by the great interest from the forum and repost at a later time. Perhaps he just wanted to flesh out his notes more and submit a more finished product later?
The notes from the meeting were pretty sketchy, but if you're already familiar with Klarman's philosophy it's easy to fill in a lot of the blanks.
The two biggest things I remember from the notes is that :
1. baupost doesn't organize the different investment subgroup "silos" in a way that each one is independent and is only allowed to invest in ideas that originated from their silo. The leader of each silo meets regularly with the other leaders so they all know what everyone else is doing. The reason for this communication is because Klarman wants everyone to discuss and invest in THE best ideas, even if it doesn't originate from their silo. The incentives and compensation for the employees are tied to overall Baupost performance, and not the performance of the individual silo, which would cause the problem as you see in other large firms of incentives that emphasize personal good over the good for the entire company. By tying the incentives to the company performance, then the Baupost individuals have less issue with favoring ideas from another silo because they will share in the bonus. This is just brilliant because it aligns the interest of everyone so it favors the overall health of baupost and its shareholder clients. You can see in places like Salomon bros. where traders all wanted to work in whatever the hot sector was, because their bonus and compensation is tied to their individual trades. It was feast or famine. Whereas the silos in Klarman that work on ideas that don't get selected still get recognized for their valuable contribution and get to participate in the overall company bonus pool. Just like the left hand helping the right hand, left hand pulls out the weeds (figuring out what is NOT the best idea to invest in), right hand harvests the fruit. It would be moronic to reward only the right hand for being brilliant enough to pick the fruit and not the left for providing a essential service of helping to produce the conditions for teh fruit to properly mature. The contributions of both were necessary. Both get rewarded, both stay happy and productive long term, sustainably.
2. Klarman believes stocks are (relatively) overvalued and too competitive of an asset class for him to have an edge. Although he looks at all asset classes and considers any opportunity. He believes his edge is in distressed bonds. They have around 20B$ in assets, I believe there's only a few billion of it in stocks. I don't remember the breakdown, but seems like the majority of that portfolio is in bonds of distressed companies and RMBS mortgage backed securities, with still a pretty large position in cash right now (20-30%?). Klarman takes advantages of forced distressed selling of bonds from mutual funds, hedge funds, private equity. They keep enough cash and liquidity with baupost that they do not fear illiquid assets and in fact relish those opportunities. From the meeting notes, it sounded like Klarman was making a killing this year from the bonds. I'd guess if he had half of that 20B$ in distressed bonds and RMBS, he's going to realize over 50% return on that . So 50% yielding over 50% is like 20B$ yielding over 25% for 2009 (my conservative guess).
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15. Yswolinsky says on Nov 09, 2009 at 6:07 AM:
i would appreciate also if someone would send a copy to me wolinsky85@gmail.con
thanks so much
p.s. does anyone know bapousts stock holdings for 3rd quarter? when does that get released?
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16. Shb600 says on Nov 09, 2009 at 8:16 AM:
I'd love to get an email of the full article sbrandt600@gmail.com
Thanks
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17. EricHSperon says on Nov 09, 2009 at 9:06 PM:
I would also appreciate it: EricHSperon@aol.com
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18. Augustabound says on Nov 10, 2009 at 4:56 AM:
[www.gurufocus.com]
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19. Toughiee says on Nov 10, 2009 at 9:12 AM:
download from here -
[bit.ly]
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21. Toughiee says on Nov 13, 2009 at 5:36 AM:
Whats wrong in sharing knowledge?
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22. Gurufocus says on Nov 13, 2009 at 6:42 AM:
We of course want to keep the notes here. But the author keeps requesting that.
Sorry about that.
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