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The $700 Used Book of Seth Klarman

July 31, 2006

Seth Klarman's 1991 work, Margin of Safety: Risk-Averse Value Investing Strategies for the Thoughtful Investor, came and went without much notice at the time and is long out of print. Klarman holds the copyright but has never revised or even reprinted it.

Still, over the past few years this work has taken on iconic stature among value investors. Originally listed at $25, the title trades for top prices on the used-book market. About a half-dozen copies are for sale online: The best deal is $700 from a seller at Amazon.com (AMZN ). Another vendor offers it for nearly $2,500.

There are other ways to get hold of it. One entrepreneur even rented it out on eBay (EBAY ) for $75 a week, promptly drawing a customer. University libraries report it as one of their most wait-listed titles as well as one most claimed as lost. (Maybe borrowers figure they can replace it at face value.) All told, just 262 libraries worldwide report having a copy, according to the Online Computer Library Center, an international database that includes about 95% of academic libraries and 75% of public libraries.

The 249-page book is especially hot among those seeking jobs with value-oriented investment firms. "You win serious points for talking Klarman," says a newly minted MBA who got his hands on a copy prior to a late-round interview with a top mutual fund firm. "It's pretty much assumed that you've read Graham and Dodd and Warren Buffett." (Benjamin Graham and David Dodd's 1934 work, Security Analysis, is a seminal book on value investing, while Buffett's annual letters to shareholders are considered gospel.) "The book belongs in the category of Buffett and Graham," says Oakmark Funds manager Bill Nygren, a collector of stock market tomes.

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