Seth Klarman

2016 Letter: Seth Klarman Is Not Only A Value Investor, He Is NonCorrelated At Heart

After delivering investors “high single-digit gains for investors across all partnerships” in 2016, Seth Klarman and the employees at The Baupost Group, all devotees of a particular investment philosophy, might have reason to cheer. No, they did not "beat the market," a challenging task to achieve on a consistent basis. What they did accomplish was coming close to the S&P 500's near 11% gain in 2016 while reasonably hedged. Delivering performance after 34 years with three down years is a feat. That is particularly the case with risk hedges in place that reduce absolute returns. In fact, delivering performance with risk management overhead is a noncorrelated feat of the highest degree. While the $30 billion Baupost Group is commonly recognized as a tremendous value strategy shop, it is more. Klarman, in a letter to investors reviewed by ValueWalk, speaks like a noncorrelated fund manager at heart. He just isn't generally recognized by this monkier.

(adsbygoogle = window.adsbygoogle || []).push({});

Seth Klarman 2015 letter: Now's Not The Time To Give Up On Value
2016 Hedge Fund Letters

Wall Street does not like to admit its mistakes or engage in introspection, and this is a mistake
Wall Street is a place where highly confident and well-pedigreed expect to make a small fortune. But there is a problem, Klarman noted in his 2016 annual letter. “Unfortunately, overconfidence makes it hard for many to hold to the possibility that they might be wrong, with potentially painful consequences.”

There was always a significant positive beta involved in stock market investing. “You can’t go wrong if you go long” is a saying that, in part, acknowledges the importance of stock market beta rising all boats regardless of individual stock picking prowess.

While beta is involved to various degrees, Klarman’s value approach is decidedly not macro.

[swpm_payment_button id=2022964]

SORRY!

This content is exclusively for paying members. Access all of our content on including years of timeless investment news and in depth analysis for only a few dollars a month by signing up here while also supporting quality content and journalism, or learn more about our premium content here

If you are subscribed and having an account error please clear cache and then cookies if that does not work email support@valuewalk.com and we will get back to you as quick as humanly possible


Saved Articles
X
TextTExtLInkTextTExtLInk

Are you a smart investor? Join tens of thousands of sophisticated investor reading our authoritative free newsletter

* indicates required

Opt out of occasional 3rd party offers


Congrats! Are you a smart person? We have a limited time offer for sophisticated and loyal readers like yourself.

Sign up today and get three months free

Use coupon code VIP19 or click on the button below

Limited time offer only expires 8/31/2019 or next 30 now just 2 subscribers whichever comes first – please do not share this discount with others

 

0