Klarman on Finding Opportunities

One great thing about a library is the ability to dig up old articles you won’t find online. I’ve ventured through the digital stacks before (there’s a century’s worth of periodicals waiting to be rediscovered).

This time, the search was for Seth Klarman. I found a Barron’s interview he did back in 1991. This was about 10 years after starting his partnership. Continue Reading…

Happy Hour: Offense and Defense

Most people only want to look at the upside. How much money can I make? How big of a return can I get? Big wins are important.

Few people ask, “How much can I lose?”

You should always play offense and defense with your portfolio. Continue Reading…

Greenblatt on Value Investing

Earlier this year Wharton released a video where Howard Marks interviewed Joel Greenblatt. It was a short interview packed with wisdom from the two value investors.

Greenblatt first came across value investing after reading Ben Graham, which offered him a new perspective on investing. He defines value investing perfectly:

Figure out what something is worth, pay a lot less, leaving a large margin of safety.

He repeated this definition several times during the interview. Most people never get past the first part, but he offers two guarantees to those that do the work. Continue Reading…

Happy Hour: Work Simply

For some reason, the idea of contrarianism has popped in my head these past few days (probably from something I read but can’t remember what). The idea of a contrarian view gets tossed around a lot in investing.

Understandably, if you want to outperform most investors you need to invest differently, independent from most investors. You’re betting against the crowd, which is not an easy thing to do. It can feel like you’re trying to walk into a stadium just as the game is letting out. Most people understand this concept, but few actually follow through with it successfully because they give up before they get to their seat. Continue Reading…

Happy Hour: Mindless Selling

In the last post, I covered a few of Seth Klarman’s investing principles from a presentation he gave to a Columbia MBA class. He briefly discussed one place he looks for opportunities. Klarman likes to take advantage of mindless selling.

One of the downsides of mutual funds and index funds are the rules defining what a fund can and can’t own. The rules dictate what gets bought or sold. Klarman offered up a couple examples: Continue Reading…