Baupost Readies Dry Power Amid Frothy Markets – Letter

With the Shiller Price Earnings Ratio hitting its second highest level since Black Tuesday 1929, which ushered in the great depression, volatility selling, “one of the hottest trades on Wall Street,” has been racking up a smooth win percentage and almost unreal risk return numbers. However, professional investors with a more skeptical investing process know that the strategy can go wrong, very wrong, when markets hit rough waters.  Jim Mooney, president and head of public investments at Baupost, is in this camp, according to a Baupost Q2 letter to investors reviewed by ValueWalk shows. [klarman] Baupost Q2 Letter Mentions takeing…