While reading Margin of Safety, I ran into one of Klarman’s statements that turns out to be very real and defines the implicit difficulty of being an investor:
“Many investors greedily persist in the investment world’s version of a search for the Holy Grail: the attempt to find a successful investment formula. It is human nature to seek simple solutions to problems, however complex. Given the complexities of the investment process, it is perhaps natural for people to feel that only a formula could lead to investment success.
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“One simplistic, backward-looking formula employed by some investors is to buy stocks with low P/E ratios. The idea is that by paying a low multiple of earnings, an investor is buying an out-of-favor bargain. In reality, investors who follow such a formula are essentially driving by looking only at the rear-view mirror. Stocks with a low P/E ratio are often depressed because the market price has already discounted the prospect of a sharp fall in earnings. Investors who buy such stocks may soon find tha the P/E ratio has risen because earnings have declined.
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GuruFocus by brian flores
Seth Klarman
Billionaire investor Seth Klarman, who
runs the Boston-based Baupost Group,
had heart bypass surgery last week and
was expected to go home Tuesday. A letter
to investors released this week reads,
according to Bloomberg: More…
, who manages Baupost group, increased
his stake in PBF Energy by 54.83%, according
to gurufocus. His shares in the refiner and
supplier of petroleum products grew from
3, 067, 828 to 8, 663, 114. He has been More…
You’ve heard of the tech bubble and the housing
bubble. Now Seth Klarman says we have to be
on the lookout for a “complacency bubble.
” The rise in equities doesn’t seem consistent
with growing More…
– Klarman’s Baupost Group has acquired a major
share in Kindred Biosciences, a bio-pharmaceutical
company specializing in the domestic animal health
market – Seth Klarman / Getty – Seth Klarman’s More…
– Klarman’s private investment group TEST3,
Baupost, has sold off two million shares in the
Eire based pharmaceuticals group, earning his
company an estimated $5.7million on the deal,
while retaining a shareholding More…
The New York Times calls the Sohn Investment
Conference, an “It” event in hedge fund circles.
So here it comes again and this time with a
wonderful opportunity: The Sohn Investment
Idea More…
Jews are well-known for being entrepreneurs,
traders and business-people who beat the odds.
Out of the best 25 money managers since the
advent of American Capitalism, 17 are Jewish!
It is something that leaves More…
