The investment industry has seen some great minds in which Seth Klarman is a shining name. He is the founder and current President of Baupost Group that is private investment partnership based in Boston. Not only that he is a successful business man but he has also written a fabulous book “Margin of Safety: Risk-Adverse Value Investing Strategies for the Thoughtful Investor”. This book covers the subject of value investing and provides a complete guide to those who are willing to invest in any kind of business.
Klarman’s Baupost Group is managing approximately $15 billion on the behalf institutions and individuals at the moment. Having more than 30 years of experience in value investment, Klarman is definitely a name that everyone knows in this industry. Not only that people take his suggestions while investing in any kind of business but they also take him as a source of inspiration. He founded Boupost in 1982 and since then he has been attached with this organization that is now a well-established private investment company.
Early Childhood and Education
Klarman was born and raised in Baltimore as his father was working at Johns Hopkins University as a public health economist. It can be said that his father was one of the motivational factors why he chose to be in investment industry as he had understanding of economics sine his childhood. He grew up watching his father talking about economic issues and how those issues affect the investments of people. Klarman’s mother was also an educated lady who used to teach high school English.
Klarman has attended two well-known Universities, Cornel University and Harvard Business School. He is a graduate from both the institutes. One thing that must be noticed about Klarman is that he was kind of orthodox student who used to watch TV in fraternity library when he as at Cornell University. While studying at Cornell, he was also a member of Delta Chi fraternity. Although, he was not an active student still he achieved Phi Beta Kappa.
Early work history
The biggest achievement for Klarman is to found the Baupost group but before that he worked for a couple of companies as well. Initially he worked for Michael Price and the Max Heine; both of these have now become a part of Franklin Templeton Investments). He left working for them in 1982 and founded the Baupost Group finally in 1982. As of 2010, this business has managed to reach at the milestone of US$ 22 Billion. The biggest distinguishing factor in his success at such investment plans where other fail is his unconventional thinking and planning. Since the foundation of Baupost, Klarman has always achieved high returns and still, he is considered as one of the most successful business person in the USA. How he thinks is like a mystery for many of the industry giants as he makes unique decisions most of the times. There are many times when he invested in such assets that were undervalued at that time and no one was willing to spend his money on them. He is a master mind when it comes to business investments and that is the main reason why is very successful today.
Personality of Klarman
Like many rich people in the world, Klarman doesn’t like to keep a high profile. In fact, he lives a simple and casual life. He is also famous for not talking a lot, speaking rarely and answering only important questions in a concise manner. Financial journalists are always willing to take his interview but he seldom gives his views about anything or makes appointments for any magazine or TV interviews. The light beard Klarman having square glasses on his eyes actually looks very humble too. Speaking less doesn’t mean that he doesn’t have a good grip on what he does but it is a part of his nature. However, recently he spoke to medial personals in a pessimistic manner while commenting on the situation of stock market and warned that there could be another inflation waiting for us in near future.
Career as an author
Klarman is not a fulltime or even part time author but based on his experience and knowledge he authored a book named Margin of Safety: Risk Averse Investing Strategies for the Thoughtful Investor in 1991. That is the only book ever written by the investment master mind and since then it has become a classic piece for those who want to learn about value investment. The book is out of print now but it has been sold for $1,200/ copy at Amazon and $2,000/ copy at eBay. This will give you an idea about the importance and efforts put in that one book by Klarman.
Klarman’s latest investments
Those who are new to the investment industry should follow great names like Klarman to determine in which direction they should go. The latest investments filled out by Klarman are described below.
– BP – Proportion of Fund: 16.7%
– HP (Hawlett Packkard) – Proportion of Fund: 15.7%
– News Corp – Proportion of Fund: 11%
– Viasat – Proportion of Fund: 11.8%
– Microsoft – Proportion of Fund: 10%
The above mentioned investments are the latest by Klarman in 2011 and you can also see the proportions of funds as well. It is said that Klarman keeps at least 50% proportions of funds but this statements seems to be wrong while looking at the investment proportions stated above.
The best thing about Seth Klarman is that he completely relies on the approval by his clients whose money he is going to invest, self-confidence and most importantly the well-organized team that he has established at Baupost. The working principles of Klarman are quite different from other industry giants and those are the same principles that he has applied in Baupost as well. The researchers and Analysts in the company are not assigned a particular market like automobile, pharmaceutical, financial or oil/gas but they are encouraged to practice their analytic abilities at opportunity markets.