Baupost Group LLC

Seth Klarman

Seth Klarman has run the Boston investment firm The Baupost Group since it was founded in 1982. A graduate of Cornell, where he studied economics magna cum laude, and Harvard Business School, where he was a Baker Scholar, Klarman learned his trade in the late 1970s as a young analyst at Mutual Shares, the deep-value shop run by Max Heine and Michael Price. It was there he absorbed Benjamin Graham's principle of buying assets for less than they are worth and holding on. Klarman was still a fresh Harvard MBA when four Boston families—William Poorvu, Howard Stevenson, Jordan Baruch, and Isaac Auerbach—pooled about $27 million of family money and recruited him to manage it. The firm's odd name is an acronym of the founders' surnames: Bauch, Auerbach, Poorvu, and Stevenson. From those family roots Baupost grew into one of the largest value shops in the country. Klarman describes himself as a risk-averse value investor. He looks for beaten-down and distressed assets selling well below their intrinsic value, and he is famous for sitting on large piles of cash for years, waiting for markets to panic rather than forcing money to work. In 1991 he wrote "Margin of Safety," a classic on value investing that sold poorly at first and was never reprinted, turning original copies into collector's items that trade for thousands of dollars. He later served as lead editor of the sixth edition of Graham's "Security Analysis."

AMZN 16.5%