Seth Klarman
Despite history's greatest investors — Benjamin Graham, Warren Buffett, Bruce Berkowitz, Seth Klarman — stressing the importance of the "margin of safety," it remains a lost art.
The poor performance of active management has been well chronicled of late but the active fund management industry is not going down without a fight. Apologists have been quick to point to artificially low interest rates as one factor dragging down the collective returns of stock pickers. Index huggers — those managers with low tracking error funds and almost no hope of outperforming their benchmark after fees — are also to blame. In response, active managers are pointing to their “active share” — a measure of how much a portfolio’s holdings differ from those of its benchmark — and research that suggests funds with the highest active share do indeed beat their benchmarks. A review of just-filed quarterly 13F reports reveals that some of the most prominent fund managers truly embrace their role as active portfolio managers.
When compared to the hedge fund industry at large, activist investors have garnered a disproportionate share of the headlines this year, and for good reason: they’ve been busy — launching 148 activist campaigns in the first half of 2014 alone — and they continue to outperform their hedge fund peers.
This book provides an overview of nine value investing strategies, including why each one is expected to work, the uses and misuses of each, and how to identify specific investment opportunities for each strategy. It is useful for both beginning and experienced value investors.
Charlie Munger once said: "In my whole life, I have known no wise people (over a broad subject matter area) who didn’t read all the time — none. Zero. You’d be amazed at how much Warren reads — and how much I read. My children laugh at me. They think I’m a book with a couple of legs sticking out.”
Thanks to a bull market and strong relative returns, assets under management for activist investors have swelled — tripling in just the last five years — allowing these high profile fund managers to launch more campaigns and take on bigger companies.
A discussion of the best 401(k) and new opportunities; Seth Klarman’s warning and permanent losses; and ISEEE white paper on emerging companies.
In a recent speech, Federal Reserve Bank of Dallas president Richard Fisher aptly remarked, “Stock market metrics such as price to projected forward earnings, price-to-sales ratios and market capitalization as a percentage of GDP are at eye-popping levels not seen since the dot-com boom of the late 1990s.”
Activist investors have significantly raised their profiles in recent years. According to Activist Insight, there were 237 activist campaigns launched in 2013, up from less than 30 in 2000. And while activists used to fly mostly under the radar, many have now embraced new media platforms as a way to make their cases heard.
The latest quarterly filings show that fund managers as a group increased their technology exposure while trimming consumer staples and financials.