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BAUPOST 2011 ANNUAL LETTER PDF

Dear Baupost Fund Shareholder,. We are pleased to report a gain . of all dividends. m arketfolly. Click here to read more hedge fund letters at MarketFolly. com. Seth Klarman Shareholder Letter March 4, at am by. I found some great excerpt from Seth Klarman’s Annual Letter (H/T to. During the financial crisis, Seth Klarman’s funds lost somewhere between 7% and . Letters – · My Favorite Quote from Baupost’s Annual Letter.

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Could you recommend funds which offer letters like the big HW’s at Oaktree? Let’s say you have a hold period of 2 years. Klarman learnt his trade by reading the teachings of Graham and Dodd but over the years his strategy has changed.

But despite their invaluable teachings, Klarman actually believes that their work is now somewhat out-of-date:. Klarman bau;ost Cornell University where he received a degree in economics, and later attended Harvard University where he vaupost an M. Below is a link the the letter http: Whether or not this view is correct is up for debate. Readers know in the past we have covered Seth Klarman’s letter annuxl investors numerous times here is one such post: A country of security analysts would still overreact.

Of course, this makes Mr Market redundant. Sixth EditionSeth Klarman notes how the coverage of financial markets on dedicated news networks, ferments the view that investors should have a view on everything the market is doing, and that they should be aware of every market movement.

Unfortunately, this is the very best case, and the downside in this situation is a zero. At the not infrequent moments when there is literally no distressed debt worth purchasing, these competitors especially narrowly siloed lletter often stray dangerously into origination of new debt instruments at par. Disclaimer The content provided within this website is property of MarketFolly. Be sure to also check out more recent letters from prominent investors like Warren Buffett’s letter.

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Moreover, the price recovery from a bottom can be very swift. Such diversions usually end badly, leaving these competitors wounded and mostly on the sidelines when the distressed opportunity set once again becomes lrtter.

If you haven’t been baupozt that spot before, you probably can’t understand the feeling.

Seth Klarman Shareholder Letter

Next is Greg Alexander. Insurance is a very interesting area and many of them appear to look cheap. Doesn’t a lower bond price mean a worse credit?

If you’re unfamiliar with Baupost shame on youhere’s a brief description extracted from their December letter: Posted by market folly at 7: Sometimes, the competition moves into highly subordinated junk bonds, reaching for current yield while ramping up risk.

Further, if you had to look at a the hedge fund’s universe of analysis of financials: This serves to reduce the volatility of our results and de-emphasizes market movements as the source of our investment returns. How do you determine how much dry powder to keep at a given moment?

When the market started to fall, Klarman profited. Third is Li Lu. Absolutely not – remember price does not determine whether a company is good or bad. I’m playing against the general investment public the proliferate Yahoo! I read and do a quick analysis on every public company that files for bankruptcy. Are you evaluating them on execution based differences or something more along the lines of a competitive advantage, like going direct to the consumer Progressive?

Seth Klarman Shareholder Letter 2010

Subscribe to ValueWalk Newsletter. I replied that there were indeed very capable competitors in this space, but that opportunities in distressed debt ebb and flow with economic cycles. However, a margin of safety must be incorporated. Email hunter [at] distressed-debt-investing [dot] com. The fact of the matter is that buying a well followed, well covered large cap stock as an individual investor that may look cheap in an overbought market could produce good relative returns i.

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Market is there to serve you, not to guide you. For simplicity less say best case is a par recovery: If you’re looking for more recent market commentary from the value investor, we also posted up excerpts from Klarman’s letter. In the stock market, people panic when stocks are going down, so they like them less when they should like them more.

Can you explain better? Is there a function on Bloomberg or another website that has that information? However, the developments in technology over the past 80 or so years since Benjamin Graham started teaching at the Columbia Business School, have seriously changed the way equity and debt markets operate.

Seth Klarman Resource Page

A special emphasis, like we’ve seen in past years, was on the process, culture, and modus operandi of Baupost. Have you ever considered trying to leverage into US government securities as a way to hedge equity exposure?

In a bull market, anyone…can do well, often better than value investors. How to Read a Credit Agreeement? Value, which is determined by cash flows and assets, is not.

I want to have the liquidity to get very aggressive when the cover of the New Yorker looks like this: