Search Results for: seth klarman

  • 07 Jul
    What We Can Learn From Seth Klarman’s Current Portfolio

    What We Can Learn From Seth Klarman’s Current Portfolio

    • You might call them boring businesses, but with a bit of portfolio rebalancing and buying more on the dips, Klarman’s positions will probably deliver his required 20% return per year over the long term.
    • In the U.S., he is overweigh LNG, refineries, communications, and pharma.
    • A few investing lessons can be derived from his current portfolio.

    Introduction

    As much as I hate bureaucracy and filing required market regulator forms and various statistical Central Bank inquiries, I must say that I love when others do it as I can get a pretty tasty free lunch from it.

    You probably know that an institutional fund manager has to disclose their U.S. portfolio positions in a 13F form no longer than 45 days after the end of the quarter with some exceptions. For example, when the manager thinks that disclosure would significantly affect share price, they can postpone disclosing, but we can get a pretty good picture of the things a specific fund is doing. More →

  • 13 Jun
    Margin Of Safety – Seth Klarman’s 10 Rules For Investing Success

    Margin Of Safety – Seth Klarman’s 10 Rules For Investing Success

    • After summarizing Seth Klarman’s book, I thought added value could be created by listing his most important investing rules.
    • Some rules are easy to understand and apply, while some go against what the majority thinks. Think averaging down.
    • Klarman achieved returns of over 20% for more than 35 years. Therefore, it’s extremely important to learn and listen when he says something as he doesn’t speak much.

    Introduction

    We have completed the chapter by chapter summary of Seth Klarman’s book, Margin of Safety. Click here to view all of these articles on the Investiv Daily website.

    As I find Klarman’s investment style so powerful and yet so simple, I thought it would be a good idea to conclude the summary of his book with 10 of his investment rules. You may want to bookmark today’s article to compare future investment ideas and opportunities against Klarman’s view on investing. More →

  • 23 Jan
    On Seth Klarman & His <i>Margin of Safety</i>

    On Seth Klarman & His Margin of Safety

    • Understanding value is just the beginning of profitable investing.
    • Would you be able to hold, on average, 33% of your portfolio in cash with peaks above 50%?
    • Studying human behavior through history is what the best hedge fund managers do.

    Introduction

    Seth Klarman’s book Margin of Safety – Risk-Averse Value Investing Strategies for the Thoughtful Investor sells on Amazon (NASDAQ: AMZN) for $1,992.92 new, and $792.33 used. It’s priced that high because it is a collector’s item that was printed in a small run.

    I believe Klarman would agree that it’s better to invest in stocks than to pay that much for a book. I agree and didn’t want to wait for the book turn up at the library, but I finally managed to get a copy.

    I’ll analyze the book, see what is still relevant today as the book was published in 1991, and share Klarman’s insights with you in a series of articles. Before we start with the book, I’ll start with some insight on Seth Klarman, his investing technique, performance, and general view on investing. More →

  • 11 Aug
    Is Value Investing Dead?

    Is Value Investing Dead?

    • The last 10 years have been terrible for value investors as it has seemed like fundamentals don’t matter at all anymore.
    • There are limited options to be a value investor as the Russell 1000 value index has a price to book ratio above 2.
    • I’ll discuss three options for what a value investor can do and the historical results of such approaches.

    Introduction

    If you’re a value investor or have been invested in a value fund, you probably aren’t the happiest investor in the world right now. More →

  • 25 Jul
    Is It Time To Invest In Natural Gas?

    Is It Time To Invest In Natural Gas?

    • There are many influences on natural gas in the short term, but the long term is pretty clear.
    • Despite the growth in demand, there is no supply gap expected, and thus cost and moats should be looked for in potential investments.
    • As the long-term trend is positive, it’s a good thing to buy when there is pessimism in the sector, which is usually for a relatively short period.

    Introduction

    I recently wrote an article on oil where I discussed the implications of and best timing to invest in oil. A commodity that is closely related to oil is natural gas. However, the long-term supply and demand trends are a bit different than those for oil which make natural gas an interesting long-term investment opportunity. More →

  • 20 Jul
    Sven’s List Of The Five Books Every Investor & Trader Should Read

    Sven’s List Of The Five Books Every Investor & Trader Should Read

    I love books on investing, and find them to be the best possible investment. For just a few bucks, you can get the synthesized knowledge of the most successful investors. On top of that, many also discuss their mistakes, which are an even more valuable source of learning.

    So with that, today I’ll the list the books on my list that I think every investor or trader should read alongside a short commentary. More →

  • 02 Jun
    Should You Follow What Hedge Fund Managers Are Doing?

    Should You Follow What Hedge Fund Managers Are Doing?

    • I’ll describe in detail how you can follow hedge fund managers.
    • It’s very important to understand the risk reward profile of the fund manager.
    • Following allows us to find great investment ideas, but there are also big traps.

    Introduction

    Every fund has to disclose its portfolio to the SEC quarterly in a 13F form which allows us to track hedge fund managers’ portfolios. It’s easy to track what George Soros, David Tepper, Seth Klarman, Dan Loeb, Carl Icahn, David Einhorn, Bill Ackman, Warren Buffett, and many, many other interesting investment stars have been doing. The data is usually disclosed 45 days after the end of the quarter, but nevertheless shows what these guys have been doing.

    When you see the research power all those funds use, you might think it’s an excellent free lunch. Well, it could be, but there are a few things to be careful of. More →

  • 23 May
    Portfolio Management & Trading – The Value Investing Way

    Portfolio Management & Trading – The Value Investing Way

    • A value investor should trade when a better bargain present itself.
    • Liquidity is a key component of an investment and of a portfolio.
    • Klarman’s advice is to stay in touch with the market to find opportunities, average down, and hold ten to fifteen stocks max for proper diversification.

    Introduction

    We’ll continue with the analysis of Seth Klarman’s book Margin of Safety. Today we’ll discuss chapter 13, Portfolio Management and Trading. More →

  • 17 May
    Hunting For Bargains? Look For These Special Situations

    Hunting For Bargains? Look For These Special Situations

    • Apart from finding bargain investments, understanding the catalysts that will unlock value is even more important.
    • Complex securities, risk arbitrage, liquidations, and spinoffs are bargain hunting territory for the value investor.

    Introduction

    Today, we’ll look at Chapter 10 of Seth Klarman’s seminal work on value investing, Margin of Safety. Chapter 10 digs deeper into value investing and discusses complex situations.

    We would all love to just run a screen, find a few cheap stocks to buy, and then wait a year or two to enjoy triple digit returns. However, as the book value of the S&P 500 is just a third of its market value, value investors are in a difficult position and therefore are forced to look for bargains in all kinds of places, dig deeper, and comprehend complex situations.

    Unfortunately, if a value investment is simple to analyze, it’s also an obvious thing for other investors which limits the discount and potential returns. This leads value investors to do research into areas such as corporate liquidations, complex securities, risk arbitrage, and spinoffs. More →

  • 02 May
    The Art Of Business Valuation – Three Valuable Valuation Methods

    The Art Of Business Valuation – Three Valuable Valuation Methods

    • Don’t expect precision from business valuation, but accuracy helps a lot.
    • Calculating net present values, liquidation values, and stock market values are the best methods to use according to Klarman.

    Introduction

    Today, we’re really digging into the essence of Seth Klarman’s book Margin of Safety.

    Some think the market, being efficient, will tell you the exact value of a business, but history has shown that in the short term it often happens that the market values businesses extremely irrationally, either on the upside or on the downside. Knowing how to properly value a business gives an investor the perfect investing edge as it allows them to disregard what the market thinks and turn that into their own advantage by exploiting market mispricings.

    Let’s see what Klarman has to say about business valuation by going through chapter 8 of his book. More →

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