The Ledger
Every statement that passed quotation and attribution checks. Mix any filter with any other: certainty 1/5, debate potential 5/5, or both at once.
why aren't all 24 resolved? a statement only gets an assessment when the public record can support or contradict it. opinions and what-ifs never can, and 0 checkable ones are still open, waiting for their date. predictions held up or didn't; assertions are supported or contradicted. on every card: ▮▮▮▮▮ certainty · ▮▮▮▮▮ debate potential. speakers are clickable
Klarman: AI will likely struggle with sample-size-of-one financial transactions
“I believe that it's likely that the artificial intelligence dealing with a sample size of close to one on a particular oddball transaction may not know what to project.”
Klarman: Baupost Invested in Chinese Equities for First Time in Decades
“We talked to our clients not that long ago about a few Chinese stocks we were finding. We had never owned anything in China for decades. It was in favor. Everybody was lining up to go there. I knew that they have a pretty authoritarian system of governance and…”
Klarman: Baupost made its biggest profits averaging down on catalyzed ideas
“We have made our big dollar profits over the years, usually on ideas that have gone against us at first, and we average down, and when they are catalyzed, Which means some event is going to happen that will cause us to make money.”
Klarman: Investors must view the market as an erratic counterparty, not validator
“If you look to the market for feedback, the market might regularly say, you're an idiot, you bought it, now it's down, you don't know what you're doing, but the reality is that you've got to see that a little bit differently. You've got to see that as the mark…”
Klarman: Baupost avoids industry analysts, sourcing opportunistically across market inefficiencies
“We don't have industry analysts per se. We don't focus on a certain equity list of let's know these 200 stocks or let's look at certain kinds of industries because we like their growth prospects. We're set up in a much more opportunistic way Where are ineffici…”
Wagner: Less than 5% of market participants are truly long-term investors
“I always say to people, everyone thinks they're a long-term investor. I think less than five percent of people are truly long-term investors based on my experience, but they were truly long-term.”
Leffell: PG&E settled with Baupost near par on subrogated insurance claims
“We settled first with Baupost, which made an absolutely brilliant investment by purchasing the subrogated claims of the insurance companies, and we settled with them for close to par.”
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…”
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.”
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.”
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.”
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…”
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.”
Klarman: Value investing frameworks apply across all asset classes, not just equities
“So I think it gave me a good analytical grasp rather than being pigeonholed into one single asset class to understand that investors can look broadly across the landscape. And if you can figure out a stock, for example, why can't you figure out the value of th…”
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.”
Wagner: Appaloosa runs higher concentration and volatility than Baupost
“Appaloosa has more volatility than what Baupost does. So Baupost has a very robust hedging program, just a much different culture of the organization, more diversified in terms of what they owned. And so Dave tended to be a lot more concentrated, a lot more ag…”
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.”
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…”
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”
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.”
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.”
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.”
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…”
Translating physical annual reports gave investors a distinct European edge in 1990s
“That was a period where we started by calling European companies up and asking them to mail us the annual report and translating it to English. And so sort of there was a window of advantage that's very, very different than there is now.”