thepupil

that's a good question, the answer to which i don't know...funds often have different series (onshor/offshore) or get reorganized or whatever...it could be when he took over as PM...it could be a less innocent explanation...

the LP’s haven’t hired baupost to do any of those things….It’s a “stay rich” fund it’s their fault not his (if they expect to beat a 15%/yr stock mkt investing in baupost) He’s more or less done what he said he would (decent absolute return, low downside). too big, too much cash, fees too high, no distress debt crisis to take advantage of… all reasonable criticisms, but all consistent for a decade… plus. anyways the thread has morphed from me defending two people from a baseless “they aren’t transparent about where their money came from” ( which is just false and ad hominem) to me defending a fund for which I have no real affinity with incomplete information. there are numerous funds out there whose goal is not necessarily to outperform. I know that will trigger a “that’s the problem!!!!” Response…

http://1icz9g2sdfe31jz0lglwdu48.wpengine.netdna-cdn.com/wp-content/uploads/2012/09/Seth-Klarman-Baupost-Group-Letters.pdf this is all I can find which has some redactions https://www.cnbc.com/amp/2017/02/08/bauposts-klarman-proud-of-funds-high-single-digit-return-last-year.html Klarman's fund has reportedly generated annual returns of 16.4 percent and $22.6 billion in net profit for his clients since inception through 2015.

He did very poorly late 90s relative to market (tech bubble), then did very well in early 2000’s, preserved capital in 2007/8* (big CDS gains), then did well on rebound from GFC but not great after that.. you are correct that if one sold in 97-99 one would have underperformed drastically. There are some letters floating around the internet. * there’s an NYT article saying >50% in 2007 and “-7 to mid teens in 2008”. Same article says 19.5%/ye since inception. Then the II article (recent) says “double digits” last decade.

https://www.institutionalinvestor.com/article/b1n5nhk92q3g62/I-Can-t-Believe-I-m-Saying-This-But-I-m-Passing-on-Seth-Klarman also if you wants fuel your klarman hate…this is a good article

I guess where you see “silver spoon”…I see the son of a smart polish immigrant*, who grew up in a professional but by no means wealthy household, went to the unglamorous Ivy (Cornell) and graduated magna cum laude, then impressed his rich professors at HBS who took a chance on him and proceeded to steward capital very well for 3 decades and has underperformed in the last decade. I mean his first 3 decades of great returns were not “given to him”…he didn’t become a legend for no reason. have you learned anything from the senator’s son from Omaha? *who became a leading economist

FWIW I know many managers from extremely privileged backgrounds and a few from less privileged backgrounds (I see no correlation to performance)

Is suffering through adversity a prerequisite for managing money? I don’t understand your point. does anyone in finance “do real work”?

Do you think Bauposts’ LP’s are unaware of the index’s performance?

gregmal you are ranting for the sake of it. Klarman’s start up capital source is on…Wikipedia. Klarman got his startup $$$ from his HBS professors and he earned the carry from there https://en.m.wikipedia.org/wiki/Seth_Klarman

I think @Xerxesmakes a spectacular point about "point in time" vs dollar cost averaging. If you invested $1mm in SPX on 8/2000 (peak), you lost 40% to March 2009 and only recovered in 2011. You have $4.7mm ending 2021 If you did the same $1mm but were adding $50K/year, your 3/2009 balance is $940K, and you have $9.1mm ending 2021 inflows don't solve everything, but for a working individual they certainly help a TON. to the extent inflows >5% / year the math is more dramatic. At various % of inflow, the 3/2009 figure relative to August 2000 is 0%: 61% 5%: 94% 10%: 126% 20%: 189% also, as you get older one's beta decreases ad you accumulate other assets... obviously the 2000-2009 experience was brutal for indexers...but inflows help (and you don't have to only own the index) also getting way too theoretical here, but the $1mm no additions in August 2000 owned $35K of S&P 500 earnings, owned $42K of them in 2009, and now owns $182K. The $1mm with $50K / year owned $35K in 2000, $65K in 2009, and now owns $354K.

at my first job as a trader 2011-2013, i told some folks i liked Berkshire Hathaway*. The first question i got from (almost) everyone was..."what happens when buffett dies?" obviously closer now than then, but Berkshire is up 12-15% /yr since then.** *i was wrong to not like FAANG / FANGMAN, FAMG or whatever relevatn acronym more but wa **not market beating but satisfying nevertheless

i pretty much agree...but i've always liked his berkshire powerpoints.

options are not cash settled. your puts to sell ARKK at $100 were autoexcercised by your broker (which was good because otherwise they'd have lapsed worthless). this is standard procedure for in the money options. What's weird to me is they automatically covered the shares or did you have to cover?

i bought some QQQ...moving from 5.5% "big tech" to 7.5%. I still feel egregiously underweight these (for the most part) high quality growing businesses at pretty reasonable/fair valuations. I buy a good bit off index /month in my 401k which i don't consider part of my portfolio and is very small right now I didn't want to preclear anything and just bought the ETF which is 12% AAPL 10% MSFT 6.5% AMZN 5% META 4% TSLA GOOG, NVDA, GOOG again PEP, ADBE, etc. wont be bottom but whatever

before someone counters with "but buffett did it" (which he did), I'll go so far as to say I wouldn't trust anyone who offered this arrangement to me because it would reflect poorly on his/her judgement and indicate overconfidence. @Gregmalis more confident and embraces the tail risk much more so than i do and is richer for it, but I'd just reiterate that personally guaranteeing losses on someone else's capital particularly if that capital is potentially flighty / short duration is a terrible, terrible idea.

no matter how unlikely the risk, making an uncompensated guarantee like this is a disservice to you and anyone who depends on you (your family). the guarantee, even if compensated, is a terrible idea that will 95% be okay, but 5% chance of ruining either your finances or your relationship with this person.

yep, it's somewhat simple. granted the spring selling season hasn't started, but right now my general neighborhood of 800 homes has 2 homes for sale. 1 is $1.1mm the 2nd is $2.5mm and not even ready (it's under construction). i think it may even be 1 because i think the $2.5mm is in another neighborhood. If you are the typical professional DC dual working family and want to live in my hood and you can't afford or wait for the $2.5mm home, you have one house to look at this week....and it will go under contract within 3 days. you're probably competing against 10 well qualified buyers, 1-2 of whom are all cash (family money often acting as a bridge loan to make all cash bid), none of which have substantial contingencies. the rate doesn't matter. the headwinds of WFH don't matter. Demand exceeds supply. if you have one spouse in big law, you're pay is massively increasing because there's a shortage of people willing to slave away in big law. it doesn't matter if the home price is 30%-40% more than 2 years ago. come and get it. so even in my low job growth, blue state, not sexy geography...i see the near term trend as up regardless of rates (within reason). in other sexier markets, they may be bringing on more supply but demand is like 10x. so demand still vastly exceed supply...for now. now id don't (fully) take mark to market gains based on a very small % of inventory turning over to the bank...I think other markets where there's more activity/market depth are probably safer, but to expect a sudden and dramatic decline in prices absent something cataclysmic or to call it a bubble, in my opinion, is not the right way to think about it.

1/2 of couple already there, 1/2 of couple moved from NYC (met during covid)

recent anecdote from a family friend seeking $1.8mm home in south florida. A house was put on market at 1.8x 2016 price, no major upgrades (maybe $100K of kitchen/bathrooms) 8 offers within 2 days (friend was trying to buy at $1.9mm w/ few contingencies). seller pulled off market because got worried couldn't secure their upgrade home given the frenzied situation they were experiencing in looking for their new home. +50 bps on the mortgage rate isn't gonna stop that train. need people to become less liquid/rich or a big event.

To be clear l, I’m not saying “sell the stock because a lot of people are shorting it” I agree shorts can provide rocket fuel (some personal examples: the office REITs we’re all 10-15% short when the vaccine came out and probably overshot fundamentals on covering, short covering (and Lully promotion)helped JOE overshoot IMO. all I’m saying is I’d pay more attention to bear case with something that’s heavily shorted than something that’s GC…

Agree to disagree with both of you. heavy short interest is typically a good indicator for LT underperformance (gross of borrow ). 2021 is obviously a huge exception. And boy were the exceptions glorious! I sthink if something is super high borrow you and it’s spiking, you should you at very least make effort to understand. shorts have been really burned after 2021 and people are gonna have a very high bar for shorting a crowded name

Real question is if Chuck is giving you 8.5% it’s probably lending out at at least double that, so I’d focus on getting comfy with the fact that someone out there is maybe paying 16% or more to bet against you. I think that’s more important than the tail risk of securities lending. it’s an invitation to recheck the thesis if demand for borrow is spiking

Canada has a 10yr tsy that yields 1.81%. In theory, Canada could organize government/GSE wrapped MBS that would have similar characteristics to US FNMA FRE GNMA securities and could introduce its citizens to the wonders of the 30y fixed. In practice, the US has a multidecadal head start in exporting this security and demand for the canuck version would be unclear since CAD is not the global reserve currency. Agencies are 2nd most liquid FI mkt in the world and a globally important asset class. this is one of the bennies of being the global hegemon..and our blessed fixed income market makers at the large IB's. America!!!

Thanks! won’t ask anymore ?’s without modicum of reaearch