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Margin of Safety- Klarman
Posted on 5/25/10 at 9:51 pm
Posted on 5/25/10 at 9:51 pm
Anyone on here read Seth Klarman's book Margin of Safety? Taking a break from CFA for a few days and want to make sure I don't waste it reading a book that turns out to be average at best.
1
Posted on 5/25/10 at 9:54 pm to samisrael
I've read it. It's worth it. Plus Klarman is one of the best value investors of all time.
Posted on 5/25/10 at 9:57 pm to LSUtoOmaha
Yeah it was recommended to me at work, but so was BBI at .31 a few days ago so I had my doubts 
This post was edited on 5/25/10 at 10:00 pm
Posted on 5/25/10 at 10:01 pm to samisrael
Good write up of it (that's a little old):
LINK
LINK
quote:
Why does anyone care what Klarman wrote 15 years ago? The author, now 49, is one good investor. Klarman earned his MBA at Harvard Business School in 1982, graduating near the top of his class. A group of wealthy families took notice and gave Klarman $27 million to manage, which was the start of his firm, the Boston-based Baupost Group. Between its February, 1983, inception and the end of June, 2006, Baupost's largest and oldest partnership posted a cumulative return of 6,133% after fees. During the same period, the Standard & Poor's 500-stock index was up 1,517%, with dividends reinvested.
This post was edited on 5/25/10 at 10:03 pm
Posted on 5/25/10 at 10:05 pm to LSUtoOmaha
Thanks. Buddy of mine found it online for me today. Wasn't about to pay $1.5K plus for a used book
Posted on 5/25/10 at 10:06 pm to samisrael
Yeah I have it on PDF. Definitely read it though. It's messages are especially relevant now. Some of the info is a bit outdated of course.
Posted on 5/25/10 at 10:08 pm to LSUtoOmaha
Same. You read his notes from the CFA meeting on the 17th in Boston? Good stuff
Posted on 5/25/10 at 10:13 pm to samisrael
Nope. Link?
Posted on 5/25/10 at 10:16 pm to samisrael
I read them, he was way more bearish than I thought he would be. What L are you studying for? Why are you trying to squeeze such a seminal work into your head the week before the test? I'm not worried about L1 but I'm not that crazy. I cut back on my regular 4 hr reading session this week and next week. shite piles up so quick its not even funny.
I cut back on my regular 4 hr reading session this week and next week. shite piles up so quick its not even funny.Posted on 5/25/10 at 10:17 pm to kfizzle85
shite I skipped over the part where he said he was taking a break from the CFA.
frick no dude. Go to a strip club or something. Read Klarman AFTER the exam.
frick no dude. Go to a strip club or something. Read Klarman AFTER the exam.
Posted on 5/25/10 at 10:18 pm to LSUtoOmaha
Klarman is the fricking man!
Posted on 5/25/10 at 10:22 pm to Tiger JJ
Do you know him personally?
Posted on 5/25/10 at 10:30 pm to LSUtoOmaha
LINK ][LINK]
Posted on 5/25/10 at 10:34 pm to kfizzle85
thanks
Posted on 5/25/10 at 10:41 pm to kfizzle85
I have I in December. Want a break from that and clawing my eyes out at work.
Posted on 5/25/10 at 10:45 pm to samisrael
quote:
JZ: What metrics did you look at that told you the time was right to deploy capital?
SK: With most stocks down 40%, it wasn’t economically too different form a depression.
We assumed a depression was going to happen, and looked for what would still work out.
One example was captive auto finance companies whose bonds
were trading at $0.40. We specifically liked Ford Motor Credit since they seemed to
be the best run. And we said, ok, you have 5% of loans defaulting. What happens if
this doubles, or quadruples, or goes up 8x? We decided that at a 20% default rate
the bonds would be worth par, and at 40% default, they’d be worth $0.60. So we
thought we were pretty safe buying since we didn’t think defaults would go anywhere
near that high. In 07/08 there wasn’t an erosion in auto loans, people just expected
there to be one. Autos didn’t have over building and multiple investment cars like
homes had. So we looked for depression protection.
WOW. Talk about calling it.
KlarmanPosted on 5/25/10 at 11:00 pm to samisrael
Ah, starting early I guess. Good to have another CFA hopeful on board. Are you working in the investment field right now? I've got a veritable library worth of pdfs/documents I've been slowly amassing (which I can link to anyone since its all in dropbox). Some of them are massive, like the Lehman Brothers report. That bitch is 3200 pages by itself (plan on printing it at work in batches :pimp). Between that, the 100+ books on my Amazon list that seems to get another book added each week + regular daily reading + the 10-12 cpe/b4 webcasts/docs that pop in my email each frickin week, I will literally never run out of stuff. Just won't happen.
Good to have another CFA hopeful on board. Are you working in the investment field right now? I've got a veritable library worth of pdfs/documents I've been slowly amassing (which I can link to anyone since its all in dropbox). Some of them are massive, like the Lehman Brothers report. That bitch is 3200 pages by itself (plan on printing it at work in batches :pimp). Between that, the 100+ books on my Amazon list that seems to get another book added each week + regular daily reading + the 10-12 cpe/b4 webcasts/docs that pop in my email each frickin week, I will literally never run out of stuff. Just won't happen.Posted on 5/25/10 at 11:01 pm to LSUtoOmaha
Yeah that was pretty ridiculous. That's why I'll never work for a hedge fund, I'm not even in that universe of intelligence.
Posted on 5/25/10 at 11:06 pm to kfizzle85
yeah buy side equity analyst for the summer
Posted on 5/25/10 at 11:29 pm to LSUtoOmaha
Hook me up please
This post was edited on 5/29/10 at 4:52 pm
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