Seth Klarman is the chief executive of the Baupost Group, a private investment partnership founded in Boston in 1982. The fund has delivered a compounded return of over 20% pa since 2008, and left him personally usefully liquid.
He is most known for having written Margin of Safety: Risk-averse Value Investing Strategies for the Thoughtful Investor, a book that he declined to reissue after the first edition, published in 1991, sold out. Original versions of this revered and influential volume sell for around $1000, sometimes more. A bit of digging will find most of the text on the internet.
Most people would like to pay less for a car, or a shirt, or a can of beans, if the opportunity arises. Low prices are good. But somehow, when it comes to investments, people like them expensive. When a share is rising in price, they see that as a reason to buy. When it is falling, they unload it.
Margin of Safety completely resets this mindset. If you behave as if you will never sell a share, you will wish to buy it as cheaply as possible. What the price does after that will have no significance for you. You will enjoy the benefits of owning it, in the form of the cash flows that are generated by the business. The exciting times are not periods of high share prices, but periods of low ones, because those cash flows can be bought more cheaply.
Margin of Safety expresses interesting views on the disadvantages of being a fund manager, who have to place whatever is invested in their funds. Private investors have more option to sit on their cash until the right moment arrives.
Margin of Safety was the biggest influence on the approach adopted by Pier Analysis.