market folly

In a 13D filed after the close yesterday, Seth Klarman's Baupost Group has boosted their position and has now disclosed a 17.8% ownership stake in Facet Biotech (FACT) due to activity on April 8th, 2009. The aggregate amount of shares beneficially owned is now 4,374,407. When we covered their 13F filing, we noted that as of December 31st, 2008, Baupost owned 2,772,092 shares of FACT. So, Baupost has boosted their position in FACT substantially. Baupost has been pretty active with their portfolio lately, having just increased their position in RHI Entertainment (RHIE) and filing numerous other SEC filings as well. You can view the rest of Baupost's portfolio here.

If you're unfamiliar with Klarman and Baupost, then here's what you need to know: Klarman received his MBA from Harvard Business School and started working at Baupost at age 25. Over the past 25 years, Baupost has seen an annual compound return of 20% and is ranked 49th in Alpha's hedge fund rankings. Klarman has always considered himself a value investor and has been patient through the market turmoil. The past few years they have had nearly half their $14 billion in assets in cash. But, with turmoil comes opportunity. And, as such, Baupost's cash has been gradually deployed by Klarman and Baupost's 100 employees, leaving them with around a fourth of assets left in cash. Klarman's investment process is detailed in his book Margin of Safety. In it, he lays out a "how-to" on risk-averse value investing. The book is no longer actively printed and is very hard to find. His take on recent market action can be viewed in his interview with Harvard Business School and his thoughts from Value Investor Insight.

Taken from Google Finance,

Facet Biotech is "a biotechnology company. The Company is focused on developing therapeutics for cancer and immunologic diseases. Its products include Daclizumab, Volociximab, Elotuzumab, PDL192, and PDL241. Daclizumab is a humanized monoclonal antibody, with a potential in a range of inflammatory diseases, including multiple sclerosis. It can be used as a maintenance therapy for organ transplant. Volociximab is a chimeric monoclonal antibody, with a potential in treating a range of solid tumors and its role in angiogenesis also aid in the treatment of age related macular degeneration (AMD). Elotuzumab is a humanized monoclonal antibody used to treat multiple myeloma. PDL192 is a humanized monoclonal antibody used to treat tumor indications including pancreatic, colon, lung, renal, breast, head, and neck cancers. PDL241 is a humanized monoclonal antibody, with a potential in immunologic diseases."