When he was four years old, he redecorated his room to fit a retail store that placed price tags on all his belongings and gave his fifth grade lecture on the logistics of buying stocks. privately which he founded in 1982 in Boston. Seth Klarman is an American billionaire and a hedge fund manager, known as a value investor and he is the executive director and portfolio manager of Baupost Group, a company. Investors are discouraged from using stop loss orders, because that way they will not be able to buy more great stocks when the price is cheaper.Do not hesitate to go against the wind and bet against the crowd.Emphasize that it is important not only to look for an undervalued asset but also to find out why it is undervalued.It is suggested that investors should focus on absolute investment results of themselves rather than comparing with the market.Willingness to restructure most of the portfolio in cash when there is no opportunity.

Suggest the use of many valuation methods at the same time, because really no one method is perfect and cannot accurately calculate the real value of a company.Usually invests in “special situations”, like stocks that filed for bankruptcy or risk-arbitrage situations.Warn Wall Street brokers, analysts and advisors, even hedge funds just want to enrich themselves rather than prioritize and care about their customers.

Calculate value carefully, use a significant and diversified security margin to help minimize risks in imperfect information environments.

Not simply finding cheap stocks, but cheap stocks of the best companies.

Extremely vigilant and focused primarily on minimizing risk.

I just share some of Klarman’s views from the book: risk and ensure sustainability in any of its decisions. “The margin of safety” is not just a rule, but a logical and intrinsically prudent mindset that helps an investor, or a businessman, or even a construction engineer, reduce risk. Therefore, he also emphasized “investing is a very lonely job”. Through the book, Klarman argues that a value investor often stands out from the crowd, defies conventional wisdom and goes against the prevailing investment direction. This book was only $ 20 when it was published, but up to now, the book cover price is 1500 $ on Amazon. Margin of Safety was written in 1991 by Seth Klarman and has also become a classic touchbook for parallel investors with Graham.

Book margin safety pdf