Saturday, July 4, 2009 0 comments ++[ CLICK TO COMMENT ]++

Seth Klarman March 2009 Ivey/UWO Interview

The Ben Graham Centre for Value Investing at the Richard Ivey School of Business (University of Western Ontario) generally conducts very good, hour-long, interviews with prominent value investors. I have linked to some of the speeches in the past and I got around to listening to Seth Klarman's speech from March. This speech made the rounds on various value investing blogs a few months ago so some of you may have already encountered it.

I'm not a big fan of Seth Klarman, mostly because he is opaque and his investments are hard for newbies to understand. He is sort of like Edward Lampert. Sites such as GuruFocus list his publicly disclosed stock picks but one can never tell what they represent. Could it be a pair trade where you can't see the short pair? Could it be a special position undertaken because Klarman or his portfolio managers know the principals at the company? Are some of the public picks spin-offs that he received for owning other private companies? Who knows?

In any case, this is an excellent speech. I highly recommend it, regardless of the type of invstor you are. One of the reasons for the strong recommendation is because Klarman touches on many different topics. I found little tidbits of insight that may be useful in the long run.

Klarman also goes over a few stocks he or his fund owns. He mentions two energy MLPs (these are like income trusts in Canada) that have hedged their prices for the next 5 years. He figures that, as long as one buys below the projected value, he will make money regardless of whether energy prices go up or down. Another pick he goes over is some pharmaceutical (or something like that) which spun off a unit that is worth more than what the market was pricing initially. One of the units earns a royalty based on sales of some drug. Klarman, like Benjamin Graham, clearly favours guaranteed income.


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