The inside story on billionaire Seth Klarman's devoted following - Business Insider

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'Oracle of Boston' Seth Klarman has a rabid following that's stuck with him through thick and thin. Here's why fans of the publicity-shy billionaire investor copy his every move.

The 62-year-old investor, who also has a stake in the Boston Red Sox and owns a horse stable that produced the winner of the 2017 Preakness, has averaged an annual return of nearly 20% since launching in 1983.This story is available exclusively on Business Insider Prime.Baupost Group founder Seth Klarman, the "Oracle of Boston," has become a billionaire thanks to his value investing ethos.

Klarman, like other long-running, successful managers, has a waiting list to invest in his fund, which further insulates him from bowing to short-term pressures. And while he's long had a dedicated following, Klarman's approach was not always for the weak of will during years of steady stock market gains led by high-flying tech stocks. Butfor many investors after the sharp stock market selloff and record volatility seen in March.

His decades-old, out-of-print "Margin of Safety: Risk-averse Value Investing Strategies for the Thoughtful Investor," reads morethan a New York Times bestseller, but first editions of the book, which was partially edited by his father and his wife, sell for thousands online. Klarman can be ironclad in his value investing convictions, and it helps to have fans who are not dismayed by a couple of years of underperformance.

"The truth is, some of our clients don't understand, but we've worked really hard over time to explain it and to educate them to our way of thinking. It isn't the only way of thinking, but it's how we approach it," he said. That advantage hasn't yet parlayed into eye-popping gains during the coronavirus sell-off however, even as markets have fallen and other hedge funds dive back into value stocks. Bloomberg reported that

Klarman told Walz that price is always the most important point when considering an investment, not business fundamentals or anything else.

 

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Value investors without humor like Warren Buffett are insufferable 😂

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