market folly

We're back with yet another interview with Baupost Group's Seth Klarman, as we keep stumbling upon more of his interesting thoughts. We also just recently posted up his interview from the Endowment Management Seminar, where he brought up some other great points.

This time around, we're posting up his thoughts from the Outstanding Investor Digest. The interview took place at the Annual Graham & Dodd Breakfast and encompasses value investing topics (as naturally Klarman and Baupost Group are value players). This portion comes from the question and answer session and he begins by stating, "For years, when someone asked me what my biggest fear was as an investor in managing my portfolio, my answer was that it was buying too soon on the way down from often very overvalued levels."

And, this quote is very relevant and pertinent to the current market environment. After all, Klarman has had a ton of cash on the sidelines over the years and has been gradually deploying it into this market turmoil. He obviously is afraid of being too early and from that we should infer that he will take his time scaling into larger positions that he deems valuable.

Klarman's methodology is unmatched by many, as he has one of the most sterling investment records in all of the investing game. As such, we have appropriately included him in our custom Market Folly portfolio which is seeing 17% annualized returns since mid-2002. Stay tuned next week as we dive into Klarman and Baupost Group's latest holdings, as per their 13F filing.

Here is the interview in full:
(RSS & Email readers will have to come to the blog to view the slidedeck)


Seth Klarman Interview -