BAUPOST INVESTOR LETTER 2012 PDF

The annual shareholder letters from Seth Klarman provides us with insight to his thought process and invaluable wisdom to approaching investing. Seth Klarman is a legendary investor. The Baupost Group, led by Klarman, has a reputation as one of the top-performing hedge funds in the world. In , Bloomberg ranked it as the fourth best hedge fund in terms of net gains since inception Baupost was established in In it are insightful quotes that I think are worth sharing.

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The annual shareholder letters from Seth Klarman provides us with insight to his thought process and invaluable wisdom to approaching investing. Seth Klarman is a legendary investor. The Baupost Group, led by Klarman, has a reputation as one of the top-performing hedge funds in the world. In , Bloomberg ranked it as the fourth best hedge fund in terms of net gains since inception Baupost was established in In it are insightful quotes that I think are worth sharing.

Without me listing all the things that could go wrong, simply consider that none of these virtuous factors are cast in stone. Just as seeds are sown during the seven lean years that allow the seven fat years to ensue, so does the reverse hold true. In his letter, Seth Klarman rightly pointed out that the past is the past. A couple of good years in the past does not always indicate good years in the future and vice versa.

We are now living at a time when these words ring louder than ever. This is reminiscent of so many similar episodes over the last few decades, where everything from technology stocks to gambling shares to gold mines had their moment in the sun. We know the current mania will end badly; we do not know when.

In a letter to shareholders in June , Seth Klarman warned of the bubble emerging in internet stocks. Looking back, it seems obvious to us that Internet stocks were vastly overpriced and the bubble would soon burst.

But hindsight is and Klarman was one of the few investors who could see it at that time. We all know by now what happened. Those who move on when the world changes at least have the chance to adapt successfully. For instance, investing in loss-making companies used to be frowned upon. But today, some of the best-performing stocks have been loss-making for numerous year.

Netflix and Amazon are two prime examples of stocks whose values have skyrocketed despite them incurring losses in the last few years Netflix is still making losses. But both these companies are increasingly worth more because of their sizeable market opportunity and their ability to easily turn a profit after reaching enough scale. Investors who are able to adapt and use different investment approaches can maximise the opportunities afforded to them in the market. We counter this necessary arrogance with an offsetting dose of humility, always asking for whether we have an apparent advantage over other market participants in any potential investment.

If the answer is negative, we do not invest. In his shareholder letter in December , Klarman describes how he and the fund makes investment decisions. I believe this is a great analogy and applies to all investors. As a proponent of value investing, Seth Klarman describes brilliantly how value investing works.

If investors are able to purchase a stock that is trading well below its liquidation value, the stock is unlikely to fall much further. The investor, hence, can get the upside potential without the downside risk. The best investments we have ever made, that in retrospect seem like free money, seemed not at all that way when we made them.

In his shareholder letter, Seth Klarman remarked how challenging it is to buy stocks in a falling market. Even if we knew that REITs looked like attractive bargains after the fall, how many of us managed to pull the trigger to buy them at those discounted prices? Today, REITs have climbed steadily and investors who bought in just a few weeks ago would be sitting on some meaty gains.

If you want to read more of his letters you can head here. By using this Site, you specifically agree that none of the information provided constitutes financial, investment, or other professional advice. It is only intended to provide education. Speak with a professional before making important decisions about your money, your professional life, or even your personal life.

Skip to content The annual shareholder letters from Seth Klarman provides us with insight to his thought process and invaluable wisdom to approaching investing.

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Seth Klarman Goes Nuts On The Fed In His Latest Investor Letter

Subscriber Account active since. Seth Klarman, the legendary head of Boston based hedge fund Baupost Group, sent out his letter to investors this week. He reports that his fund is up for the month, quarter, and year, but is sending out specifics in separate quarterly reports. That said: The juicy part of this letter has nothing to do with specific investments or anything like that.

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A Collection of Quotes From Legendary Investor Seth Klarman’s Letters

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