Margin of Safety - Seth Klarman

[CorpRaider]

Kind of highlights that he should run an electronic/kindle republication.  Could donate the proceeds to charity or something if he doesn't want to be bothered.

[LongHaul]

I like Klarman but very much disagree with him not putting more copies of his book out there or putting it on Kindle.

 

If you write a book to share knowledge then publish it, let people have access to it. 

Perhaps he doesn't want the competition or just likes the book to be $2,500.

 

Seems like an ego issue to me.

 

Contrast that with Buffett, Munger and Graham who have been very generous with helping to educate people.

[Liberty]

https://www.cnbc.com/2018/07/10/hedge-fund-legend-seth-klarmans-investing-classic-margin-of-safety-.html

 

On Tuesday Klarman's firm, Baupost, said the book listing on Amazon was not legitimate.

 

"The Kindle version of Margin of Safety: Risk-Averse Value Investing Strategies for the Thoughtful Investor on Amazon is an unauthorized version being sold in violation of its registered copyright, which is owned by Seth Klarman," a Baupost spokesperson said in an emailed statement. "Mr. Klarman has not authorized republication of Margin of Safety, electronically or in any other format. Our legal department is taking and will continue to take appropriate action with respect to this matter."

[Liberty]

On Tuesday Klarman's firm, Baupost, said the book listing on Amazon was not legitimate.

 

"The Kindle version of Margin of Safety: Risk-Averse Value Investing Strategies for the Thoughtful Investor on Amazon is an unauthorized version being sold in violation of its registered copyright, which is owned by Seth Klarman," a Baupost spokesperson said in an emailed statement. "Mr. Klarman has not authorized republication of Margin of Safety, electronically or in any other format. Our legal department is taking and will continue to take appropriate action with respect to this matter."

 

https://www.cnbc.com/2018/07/10/hedge-fund-legend-seth-klarmans-investing-classic-margin-of-safety-.html

[Guest]

Pretty sure he likes all of the mystique. I couldn't imagine Buffett doing something like not making copies of his material available at a low cost.

[Rod]

I have one of the crappy PDFs of this book. I think it's a good book, but not great. I would say it's overrated actually. Good for it's time, but there are better books available now. I think if it were easily available it wouldn't be thought of as highly as it is.

[Gregmal]

I've read the book and it's a good read if you are into investing but nothing spectacular and agree it's only regarded the way it is because of it's rarity. Klarman himself seems to be a bit of a jerk. Just like Paul Tudor Jones supposedly buying all the copies of his PBS documentary on the 87 crash, how friggin narcissistic do you have to be put something out there(presumably for money) and then later go out of your way to prevent people from using it?

[Saluki]

Someone published a bootleg version a while back.  I see it pop up periodically on Ebay.  Looks like the original, including the cover, but the binding is different, so buyer beware!

 

I have heard him say that he may one day update it and reprint it with the proceeds going to charity.  I'll buy several copies if that day ever happens.

[CorpRaider]

The bigger point is:  Amazon is getting so shady.  It is really undermining my confidence in the legitimacy of things I buy on their site.  I think the marketplace aspect is long term deleterious to the retailer brand and I would advise TGT and WMT not to go down that road and only sell legit shit they vetted on their sites.

[DooDiligence]

He probably has a stack of 1st editions with unclipped dust jackets & is doing a pump & dump on Amazon & FeeBay.

 

I doubt I'll ever read it again since it was mostly common sense.

[Jurgis]

The bigger point is:  Amazon is getting so shady.  It is really undermining my confidence in the legitimacy of things I buy on their site.  I think the marketplace aspect is long term deleterious to the retailer brand and I would advise TGT and WMT not to go down that road and only sell legit shit they vetted on their sites.

 

LOL, too late. WMT is already selling 3rd party electronics (at least, maybe other things too) that is as shady as Amazon marketplace.

[Lakesider]

The book is a marketing tool, The high price means everyone has heard about Klarman and Baupost. Its a clever and deliberate strategy.

[CorpRaider]

That really hurt shop your way, to me.  It was sketchy as fk.

[Nomad]

I have one of the crappy PDFs of this book. I think it's a good book, but not great. I would say it's overrated actually. Good for it's time, but there are better books available now. I think if it were easily available it wouldn't be thought of as highly as it is.

 

I'm not even sure you could consider it a very good book for its time.

 

Everything in Klarman's book - including the the title - was lifted straight from Benjamin Graham, who expressed the essence of value investing much earlier and more eloquently in The Intelligent Investor. There is little to be learned from Klarman if one has even a passing familiarity with Graham's work.

[bizaro86]

Think about it from his perspective. He probably got tons of extra publicity/client funds/higher fees from being the guy with the $2000 book. It could have been him bidding up the prices and it likely would have been a good investment.

 

Maybe he could make $1MM by offering reprints, but that pales in comparison the value of the aura he's created.

[boilermaker75]

I have one of the crappy PDFs of this book. I think it's a good book, but not great. I would say it's overrated actually. Good for it's time, but there are better books available now. I think if it were easily available it wouldn't be thought of as highly as it is.

 

I'm not even sure you could consider it a very good book for its time.

 

Everything in Klarman's book - including the the title - was lifted straight from Benjamin Graham, who expressed the essence of value investing much earlier and more eloquently in The Intelligent Investor. There is little to be learned from Klarman if one has even a passing familiarity with Graham's work.

 

I read Margin of Safety several years ago, but that is my recollection. I didn't find anything new, or unique, in it.

[rb]

You know what, I'll echo what others said here. Screw Seth Klarman and his book. I have the book and I've read it. Anyone who paid $1,000 for it is insane and no investor in my book. Klarman is a much better investor than he is a writer. There's nothing in there that the median member on this board doesn't already know.... and membership on this board costs only 20 bucks. If you can get it for $15 sure go for it, but otherwise forget it. My guess is that Klarman doesn't want the book out there because he doesn't want people to read it and realize how bad it is.

 

A sizeable part of the book is about how efficient the market is, having respect for it and acting when you have an advantage over the market. Very academic stuff. But in my book, the market is like a wild beast so you have to have respect for it. However, as a value investor you have to be arrogant to a certain extent. You have to know the market is wrong and you are right. It doesn't work if you're constantly petrified by the market.

 

Instead of focusing on Klarman's crappy book I'd recommend reading "The Intelligent Investor" in conjunction with "Loosing My Virginity" and "Screw It, Let's Do It". You'll come much more ahead and save a bunch of money to boot.

[Guest]

I do wonder how good of an investor Klarman really is. He's averaged about 17% a year since inception I believe (which is great). However, he holds a substantial level of cash. I believe he trailed the S&P 500 from inception to 2000 (and made a killing after that). I'm confident to say he's probably trailed the last 5-10 years by a substantial margin too  (he's been bearish at least since 2010). I think it's been said that Klarman is one of three investors Buffett would allow to invest his money so that speaks volumes.

[DooDiligence]

I think Howard Marks' treatment of "Margin of Safety" is wayyy more important.

 

Makes Klarman's book look amateurish.

[Spekulatius]

I think Howard Marks' treatment of "Margin of Safety" is wayyy more important.

 

Makes Klarman's book look amateurish.

I found Howard Marks book unremarkable too. I know he is revered here, but I really didn‘t get much from his book, other than the idea to think about where we are in a cycle. Even with respect to the latter, it might just be better not to think about cycles at all and look at all Investments case by case and forget about the large picture.

[John Hjorth]

I did ask Sanjeev to merge this topic with the topic in the General Discussion forum, which by Sanjeevs initiative took place about 1.5 hours ago. Thank you Sanjeev. [Just so that nobody is confused what has happened here on CoBF.]

 

I think Howard Marks' treatment of "Margin of Safety" is wayyy more important.

 

Makes Klarman's book look amateurish.

I found Howard Marks book unremarkable too. I know he is revered here, but I really didn‘t get much from his book, other than the idea to think about where we are in a cycle. Even with respect to the latter, it might just be better not to think about cycles at all and look at all Investments case by case and forget about the large picture.

[CorpRaider]

I have one of the crappy PDFs of this book. I think it's a good book, but not great. I would say it's overrated actually. Good for it's time, but there are better books available now. I think if it were easily available it wouldn't be thought of as highly as it is.

 

I'm not even sure you could consider it a very good book for its time.

 

Everything in Klarman's book - including the the title - was lifted straight from Benjamin Graham, who expressed the essence of value investing much earlier and more eloquently in The Intelligent Investor. There is little to be learned from Klarman if one has even a passing familiarity with Graham's work.

 

I read Margin of Safety several years ago, but that is my recollection. I didn't find anything new, or unique, in it.

 

Reading it now.  Agree.  Also much of it is quite dated.  I definitely see why he hasn't republished the book.  The only real value I'm getting from it is a concrete example of why high priced, glamour stocks don't typically work out.  High prices and expectations leading to utter disappointment when met with merely average results.  haha.

[Saluki]

I think it's well written because it can be easily understood by a lay person.  A lot of books on investing are full of jargon or written by people who are terrible at writing, so it stands out because it's not terrible--which is the norm.  It's a good book, but definitely not worth $1000+

 

I think I'm the only one on here who is not a fan of The Intelligent Investor.  Maybe I need an earlier version of the book but something about the writing style in that book (and Security Analysis) I find quite grating. 

 

Books I have liked and re-read from time to time

 

Peter Lynch: One up on Wall Street

Greenblatt: You Can be a Stock Market Genius (only the title is terrible, the rest is wonderful)

Phil FisherL Common Stocks, Uncommon Profits

Marks:  The Most Important Things

Pabrai: Mosaic (hard to find, and mostly reprints of articles, but I think better than his other book, which is also good)

 

and

 

Berkshire Letters to Shareholders 1965-2014, in hardcover, is not recommended enough.