Superinvestor (1) Seth Klarman
From an interview from 2009 Ivey Investing Class with Seth Klarman Baupost 3 main principles Principle 1: Focus on Risk before Return To focus on multiple scenarios, what can go wrong, how much can I loose Risk is not Beta (as taught in academics), it makes no sense. Volatility is not risk, volatility creates opportunities. Risk is the probability of losing and how much you can loose Wallstreet wites more bullish than bearish, but when they do think about other scenarios, they to oversimplify, i.e. single point estimate instead of a range of possible outcomes Principle 2: Focus on absolute returns, not relative The world is oriented to relative performance, giant weakness that all the big mutual funds are focus on competing against each other, e.g. relative number focus -> market is up 20%, "our" fund is up 21%. If you perform well or if you avoid the bottom quartile of all performers or if you are in the top half, you almost neve...