This is a guest article for Capital Allocators’ China Chapter (to be published in Chinese in August), we first published it on lionsassociates.com, an asset management firm I co-founded with a fellow Columbia Business School alum.

Many well-known investors have been hailed as the “next Buffett,” and among them is a low-profile veteran who has achieved a 20% annualized return over a career spanning more than 40 years – Seth Klarman, the CEO and fund manager of Baupost Group.

Let’s go back to April 23, 2015, at the “Value Investing with Legends” class at Columbia Business School. Professor Bruce Greenwald opened with, “Today, we are fortunate to have a very special guest, the connecting tissue in the world of value investing. His boss, Max Heine, the founder of Mutual Shares, was Benjamin Graham’s stockbroker, and many of his students have become outstanding value investors of our generation, including one that you all should know, Seth Klarman. Ladies and gentlemen, please welcome Michael Price!”

(The late Michael Price)

Over the next 20 minutes, Mr. Price opened that day’s Wall Street Journal, vividly demonstrating how he reads the newspaper: from filtering the headlines (which ones to read now and which to save for later or the weekend) to focusing on useful news for analysis and making quick judgments on their impact on the investment portfolio, and finally arranging the next steps. The topics covered short-term financial reports, acquisition events, the healthcare and energy industries, and the presidential election, among others. It was as if we were there with him, attending a morning meeting, experiencing firsthand Price’s breadth and depth of knowledge, judgment, and decisiveness. Throughout the process, the underlying theme was to focus on extracting actionable insights. This lesson, eight years later, remains profoundly insightful for how we can stay focused, filter out noise, and effectively absorb information in today’s era of information overload. Additionally, during this class, through his teacher, we gained a glimpse into Seth Klarman’s early experiences, which he rarely shares in interviews.

This interview with Capital Allocators provides a rare opportunity to directly listen to Seth Klarman’s personal story and investment philosophy. Here are some interpretations and reflections on this interview:

Continue reading “Timeless Reflection from Seth Klarman Interview” →