Comments on: Fund Manager of the Decade….Seth Klarman?

By: Mr. Tuxedo

Mr. Tuxedo — Thu, 03 Dec 2009 09:17:58 +0000

There are more than a few reasons why Klarman has done so well.
Price/Mutual Qualified arbitrage background must have instilled in him some uniquely good habits.
50% cash at times, means he takes full advantage of opportunity cost and selects set-ups, or sits on his hands, instead of fund managers who daily scale in and out of positions.
http://papers.ssrn.com/sol3/papers.cfm?abstract...>
If you take a look at his current holdings, many of the names are a mystery, yet he sees value in things like Liberty Media.
http://www.gurufocus.com/holdings.php?GuruName=...>
Picking winning small caps and running with them over their life cycle to see them develop into large caps allows fund managers to outperform.

By: Pete

Pete — Thu, 03 Dec 2009 08:27:14 +0000

Why the change from NCAA?

By: keithpiccirillo

keithpiccirillo — Thu, 03 Dec 2009 03:17:58 +0000

There are more than a few reasons why Klarman has done so well.
Price/Mutual Qualified arbitrage background must have instilled in him some uniquely good habits.
50% cash at times, means he takes full advantage of opportunity cost and selects set-ups, or sits on his hands, instead of fund managers who daily scale in and out of positions.
If you take a look at his current holdings, many of the names are a mystery, yet he sees value.
Picking winning small caps and running with them over their life cycle to see them develop into large caps allows fund managers to outperform.

By: Pete

Pete — Thu, 03 Dec 2009 02:27:14 +0000

Why the change from NCAA?

By: WorldBeta

WorldBeta — Wed, 02 Dec 2009 21:10:35 +0000

Sure, everything on the blog is public.

By: WorldBeta

WorldBeta — Wed, 02 Dec 2009 21:09:48 +0000

My point was not that I would have selected Baupost in 2000 vs. these guys (I was still in college studying genetics and had no idea who Klarman was). My point is there are (lots of) hedge fund managers that beat even the BEST mutual fund managers.

And yes it is fair since you're comparing both ex post. (ie you're looking back at who the best 5 mutual funds were, then I'm comparing that to just one great HF.)

Now, if your question is: "Can someone identify superior managers that add value ahead of time NOW", then that my friend is the right question.

By: rower32

rower32 — Wed, 02 Dec 2009 21:07:26 +0000

“You know how I feel about mutual funds – it’s kind of looking to Europe for the best players when the NBA clearly attracts the best talent.”

i'd like to use this with your permission, how true!

By: Realist

Realist — Wed, 02 Dec 2009 21:05:53 +0000

Aren't your comparisons of returns completely unfair? Sure I know NOW that the top 20 positions of Baupost COULD HAVE beat these. I also know NOW that I should've bought every possible stock at the March lows. I think you're being 'historically selective' with your comparisons.

By: brettalexander

brettalexander — Wed, 02 Dec 2009 18:52:33 +0000

If you would have just cloned/owned and rebalanced Berkowitz's top holding throughout the decade, Alphaclone reports a 21.8% annualized return. Unbelievable.