He seems to have a dedicated following (Maybe somebody'll buy my marked up copy of "Margin of Safety" at the going $700 rate or whatever they are at Amazon now), and a great record perhaps-- 20% plus for 24 years (according to the article). I look at his picks and they seem so strange to me. Imo, at odds with his safety first, don't lose money rules. I am one who'll say okay, great record, but if I were to make any decisions based on it (like deciding to buy into his fund or just go along with his picks), man, I want to see some audited statements.
He runs Baupost. I've never been able to understand his stock picks. On the one hand, that might be exactly what he wants -- talking deep value here, requiring the hard work and in-depth research that most people (including me), won't do. That gives him almost an exclusive to pick up great bargains, I assume. OTOH, even though he states his ideas/philosophy, there's no way that I see any consistency in his methodology. I can't see the method at all. Could be just me. At least for me, if you read my picks here, you might not agree with anything I'm buying, but at least you will sometimes see some method to what I'm doing.
Here are Baupost's holdings:
nasdaq.com
I have gone through every one of the holdings. For me, there's not one stock that stands out as an absolute bargain or that I can spot easily as having a margin of safety or a moat. Most of these stocks, I've never even heard of. Just seems so strange to me that these are the things that will propel Baupost to 20% gains year after year (with a margin of safety too)
He has ELOS. I have that too. Not a value stock, imo. It's maybe a garp or relative play (imo). And if so, it's at odds with the apparent disdain Mr. Klarman espouses for "relative" bargains.
He holds MLS at an apparent loss. Mills Corp.'s been discussed here. Could anybody who's a casual investor know if MLS will survive and thrive and that it has a margin of safety? Can only dedicated professionals like Mr. Klarman really be so sure the odds are in their favor?
Cold Springs Capital (CDS). It's typical. Information is sketchy/not easily available. Maybe a good deal for and according to Mr. Klarman, but how is anybody else to see it? So many like that. I see HRZ, a big holding. Shipping container co. with high p/book, high d/e, not much public history, not much earnings reported. I've not done comparables in the sector, but for me, if there's a margin of safety with this stock, I sure don't see it.
These stocks will mostly perform well, if Mr. Klarman continues his record. That's not the point. For me - that's me, others may differ - his picks are useless, because I just can't see what the logic or reasoning is behind them. I'm willing to bet on the jockey sometimes (esp. if he's W. Buffett -g-), but these things Mr. Klarman runs with are way too obscure or arcane for me.
All jmo. (And of course perhaps it's just my problem or issue that I don't comprehend these picks.) |
