Seth Klarman

CEO & Portfolio Manager, The Baupost Group · 1 appearance on the record.

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investorexecutiveauthorfounderbaupost.com/leadership/seth-klarman ↗Wikipedia ↗

He co-founded Boston-based hedge fund The Baupost Group in 1982 and built it into one of the world's most prominent value-investing firms. He authored the 1991 book Margin of Safety and served as lead editor for the seventh edition of Graham and Dodd's Security Analysis.

43statements → 2claims → 1claims resolved → 3.65/5average certainty → 2.19/5average debate potential → ≈4.5/5argument clarity, estimated → 61said about them ↓

1 supported 0 partly supported 0 contradicted 1 not checkable as stated how the 2 claims stand · each chip opens the sources

1 prediction · 1 assertion · 9 opinions · 17 insights · 13 disclosures · 2 what ifs · every statement was checked. The prediction and assertion are the 2 claims: statements the public record can support or contradict. 1 is resolved, and 1 names no date, number or outcome precise enough to check. Everything else (opinions, insights, what ifs, disclosures) can never be settled by the record, so it carries no assessment.

The record, in short

What the tape says about how Seth argues and how the claims held up. Everything they said, and everything said about them, is in the tabs below.

Their most notable supported claim

Assertion Supported

Klarman: Baupost Has Lost Money in Only 5 of 41 Years

“So Baupost has only lost money in five of its 41 years, all but two of those have been in the mid-single-digit range or less.”

Seth Klarman Jul 17, 2023 ▶ 58:03 Seth Klarman – Timeless Value Investing (EP.328)

How they sound: not measured why? →

We measure speaking style by listening to the audio itself, and a fair number needs at least 2,000 words from one person on tape we have measured. There is too little of Seth Klarman on measured tape to publish a rate. This says nothing about how they speak.

What they said43 What others said61 Episodes1

Everything Seth Klarman said on Capital Allocators that made the record, most notable first. Filter by type, assessment or year in the ledger →

Insight

Klarman: Baupost hunts 'miles wide' before drilling 'miles deep'

“I like to say we go miles wide to look for opportunity, and then when we think we found it, then we drill miles deep. Maybe the contrast is that other people are going miles deep first, so they know everything about every industry.”

Seth Klarman Jul 17, 2023 ▶ 36:16 Seth Klarman – Timeless Value Investing (EP.328)

Disclosure

Klarman: Baupost Lets Proven Senior Partners Make Bets He Doubts

“If it's a senior partner who's produced a lot of profit for the clients over the years, and they want to do something that I'm not sure about, I tend to give them room to do that.”

Seth Klarman Jul 17, 2023 ▶ 49:14 Seth Klarman – Timeless Value Investing (EP.328)

Insight

Klarman: Cross-Asset Investing Requires a Single Portfolio Manager with Final Say

“The final say, a portfolio manager still needs to sit on top of the structure, and it's because we slosh money into and out of areas. So we might have loaded up on corporate credit over the last six months, but if tomorrow there's something better to do in a p…”

Seth Klarman Jul 17, 2023 ▶ 49:52 Seth Klarman – Timeless Value Investing (EP.328)

Disclosure

Klarman: Baupost Compensates Staff on Firm-Wide Rather Than Individual Performance

“And we try to pay people not just on their own bottom line, but on a firm-wide bottom line for that exact reason.”

Seth Klarman Jul 17, 2023 ▶ 50:29 Seth Klarman – Timeless Value Investing (EP.328)

Assertion Supported

Klarman: Baupost Has Lost Money in Only 5 of 41 Years

“So Baupost has only lost money in five of its 41 years, all but two of those have been in the mid-single-digit range or less.”

Seth Klarman Jul 17, 2023 ▶ 58:03 Seth Klarman – Timeless Value Investing (EP.328)

Insight

Klarman: Investors should require a 200 to 500 basis point illiquidity premium

“Generally, when clients ask this, I say you ought to make several hundred basis points. I don't know if that's 200 or 500 basis points, but giving up the liquidity, the right to change your mind is worth a lot.”

Seth Klarman Jul 17, 2023 ▶ 59:53 Seth Klarman – Timeless Value Investing (EP.328)

Insight

Klarman: Investing in Foreign Markets Without Local Presence Creates Serious Disadvantage

“We're humble enough and cautious enough to know that if you don't live in a country, if you don't have people that are active in that country, you're at a real disadvantage, and so I have no idea what the premium should be for buying Equities in Africa, equiti…”

Seth Klarman Jul 17, 2023 ▶ 1:02:15 Seth Klarman – Timeless Value Investing (EP.328)

Opinion

Klarman: Western Europe Does Not Require Significant Risk Premium Over US

“The vast majority of our investments are US and Western Europe, and I don't know that Western Europe needs particularly significant risk premium over the US.”

Seth Klarman Jul 17, 2023 ▶ 1:02:38 Seth Klarman – Timeless Value Investing (EP.328)

Disclosure

Klarman plans to step down from running Baupost within 15 years

“I don't think I should be running bow post more than another 15 or so years.”

Seth Klarman Jul 17, 2023 ▶ 1:14:52 Seth Klarman – Timeless Value Investing (EP.328)

Insight

Klarman: Investing skill is cumulative and improves risk perspective over time

“I'd like to think as long as I'm sharp that the investment skill set actually is a cumulative additive thing where you may be Not familiar with the latest change in technology in the world, but you have a large amount of perspective on what are good entry poin…”

Seth Klarman Jul 17, 2023 ▶ 1:15:05 Seth Klarman – Timeless Value Investing (EP.328)

What-if

Klarman: Baupost was originally planned as an allocator to outside managers

“Baupost would have been formed with me or without me, but my coming along maybe changed the trajectory, and they realized the original plan was to hand out the capital to smart money managers.”

Seth Klarman Jul 17, 2023 ▶ 20:15 Seth Klarman – Timeless Value Investing (EP.328)

Disclosure

Klarman: Baupost told brokers to bring illiquid stakes, not mainstream stocks

“We'd say, look, you don't need to come by, but if you guys ever see on your desk a bond that you've never heard of, or a stock you've never heard of, or a shareholder in a business that wants to move it quickly, we're your call. So don't call us with IBM Insig…”

Seth Klarman Jul 17, 2023 ▶ 41:13 Seth Klarman – Timeless Value Investing (EP.328)

Disclosure

Klarman: Baupost Holds Partner-Free Weekly Lunches for Analysts to Test Ideas

“We have our analysts meet once a week at lunch. Anybody who's around and wants to meet, the partners don't attend that. So it's a free space for analysts to be running things by each other and not feel like partners gonna hear them or they might judge them for…”

Seth Klarman Jul 17, 2023 ▶ 46:52 Seth Klarman – Timeless Value Investing (EP.328)

Insight

Klarman: Catalysts Shorten Duration and Reduce Market Dependence

“Then you can also mitigate with catalysts. Catalysts shorten your duration. They make you less dependent on the overall level of the market in the future.”

Seth Klarman Jul 17, 2023 ▶ 56:02 Seth Klarman – Timeless Value Investing (EP.328)

Insight

Klarman: Science progresses secularly, but finance progresses cyclically

“Science progresses secularly, but finance progresses cyclically, and that most ideas have been around before, and we repeat the same mistakes, and there's a lot to learn from studying past periods.”

Seth Klarman Jul 17, 2023 ▶ 1:07:54 Seth Klarman – Timeless Value Investing (EP.328)

Disclosure

Klarman: Baupost expands debt holdings to about 15% of its portfolio

“Now, we've rebalanced into credit. Everything we do is bottom-up. It's not top-down asset allocation, but we found enough debt to make that about 15% of our portfolio, and that's been pretty steadily growing.”

Seth Klarman Jul 17, 2023 ▶ 1:10:03 Seth Klarman – Timeless Value Investing (EP.328)

Disclosure

Klarman: Baupost reduced equity exposure and is focusing on catalyst-driven positions

“So while our credit exposure has gone up, our equity exposure has gone down somewhat, and we're trying to focus a greater percentage of the equity book on positions with catalysts.”

Seth Klarman Jul 17, 2023 ▶ 1:11:14 Seth Klarman – Timeless Value Investing (EP.328)

Disclosure

Klarman: Baupost requires prospective LPs to read five annual letters first

“Literally, I've had people offer us money, and I've said, I won't take your money until you read this annual letter, and you read the last five years, and you understand what we do”

Seth Klarman Jul 17, 2023 ▶ 1:13:04 Seth Klarman – Timeless Value Investing (EP.328)

Disclosure

Klarman: Passed on Boston Celtics stake before buying into the Red Sox

“Somebody had approached me to buy into the Celtics when that franchise changed hands something like 20 years ago. And I thought about it, I thought hard, but I passed because I felt like my true love was baseball. And I said to the sports agent who was marketi…”

Seth Klarman Jul 17, 2023 ▶ 1:24:27 Seth Klarman – Timeless Value Investing (EP.328)

The other half of the tape: Seth Klarman's own voice is left out of every number here. Other people bring the name up 60 times in 25 episodes on Capital Allocators. 1 statement on the record names them. every mention, with the transcript →

Who brings them up most Ted Seides 13 Ryan Batchelor 10 Herb Wagner 10 Paul Sonkin 3 Kip McDaniel 3 David Salem 3 Reuben Munger 2 Michael Mauboussin 2

Statements about Seth Klarman, by other people (1)

Assertion Not checkable as stated

Singh: Seth Klarman and Dwight Anderson responded to his undergraduate cold outreach

“I started writing all of the investors that had gone to Cornell, Seth Klarman and Dwight Anderson, all these guys, and probably none of them remember me messaging them. And they all responded because this is before I think they had become the superstars that t…”

Savneet Singh Nov 1, 2021 ▶ 6:12 Savneet Singh – The Operator/Investor whose Software is Feeding the World (Capital Allocators, EP.220)