MARGIN OF SAFETY SUMMARY (BY SETH KLARMAN)

Seth Klarman is a legendary value investor with some $25B in assets under management at his Baupost Group. In 1991 he released a book called “Margin of Safety – Risk Averse Value Investing Strategies for the Thoughtful Investor” which has become something of a must-read among sophisticated investors. Unfortunately, it is out of print, and a physical copy cost $2,000 to get from Amazon. One can only speculate of WHY Mr. Klarman decided not to make a second edition, there’s clearly demand for it these days. Is it because he’s already wealthy enough so he just doesn’t care? Is it because he offended some group of people that doesn’t like being offended? Or is it because he thought that maybe he revealed a little too much of his investing secrets? I don’t know. But I had to get a copy myself, in order to bring you guys this top 5 takeaways summary. Let’s dive in!

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Timestamps for Margin of Safety:
00:00 Intro
01:08 What’s the Difference Between a Value Investor & a Speculator?
04:00 Investment Risk – A Terribly Misunderstood Concept
06:48 Three Methods of Valuing a Stock
10:15 To Hold, or Not to Hold … Cash
13:01 Apply the 80/20 Approach

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My goal with this channel is to help you make more money and improve your personal finances. How to become a millionaire? There are many ways to get there – investing in the stock market, becoming a stock trader, doing real estate investing, or why not becoming an entrepreneur? But whether you are interested in how to invest in stocks or investing strategies for creating passive income with rental properties – I hope to be able to provide you with a solution (or at least an idea) here. Warren Buffett - the greatest investor of our time - says that you should fill your mind with competing ideas and then see what makes sense to you. This channel is about filling your mind with those ideas. And in the process – upgrading your money-making toolbox.

[jeremynewell]

I like Drunkenmiller's approach. He is pretty quick to pull the trigger when something looks obvious, then he and his team double-check the investment afterwards.

[robertmariano]

Factoid: In March of 2020 one of Seth Klarman’s Baupost’s stocks was Veritiv (VRTV) which was ≈ $7.50. In 2022, Veritiv rose to ≈ $160.00. Recently, it’s around $135.00. Great video, I’m glad you bought the book. UPDATE: In August 2023, Veritiv agreed to be bought out for $170.00 per share

[chinmaymishra]

Thank you Swedish Investor for great book reviews and content as always!!

[PartTimeInvesting]

You just saved me $2000. Thank you! I really appreciated the distilled wisdom this channel provides. It's been a huge help to me.

[FindependenceChannel]

Great summary - love Seth Klarman! DCF is a great way to value a stock and the reverse is a great way to try to understand what is prices in.
To me the time aspect of the book is another very important lesson - it is more of a marathon than a sprint.
Overall though I do find it a bit too theoretical.

[ambition]

0:00: 📚 Seth Klarman's book 'Margin of Safety' is a must-read for value investors, but it is out of print and expensive to buy.
3:01: 📉 Investing in assets that do not produce cash and rely on speculation is not considered an investment but pure speculation.
6:22: 💰 Valuing stocks: liquidation value, stock market value, and discounted cashflow analysis.
9:40: 💰 The importance of having a margin of safety and considering opportunity costs in investing.
12:45: 💰 Apply the 80/20 approach to investing in the stock market by focusing on cashflows, valuing stocks using different methods, and spending time exploring many ideas.
Recap by Tammy AI

[amitbahadur]

Thank you! Always wanted to read it but its price was always an issue.

[JJ-iope]

It is out of print because it is offered for free online for a long time now.

[rachaellynn]

Appreciate your review @TheSwedishInvestor. I re-read my copy after some years and note that Klarman, like David Swensen (Yale former endowment manager, RIP) says that the deck is stacked against the individual investor. How can an individual get involved in liquidation or merger-arbitrage opportunities? If you have any thoughts, please share them. And thanks again -- love your channel.

[programmingaspiration]

Youre the goat for sharing with the masses like this, I could never afford this in the immediate future. Thank you

[zero.trader]

FINALLY! I am waiting for this in Ages bro, thank you 🔥 I love Seth Klarman.

[danielsimonson]

I noticed a monitoring screen on my watchlist. Now when i find a company that i like and want to invest in. I add it to my watchlist, and write in the price i would by it at. I also set an alert when the price drops below that price. It is nice getting a text from fidelity telling me there is a deal waiting for me should i want it.

[philroberts]

That's great Eric! haha what about speculating on rare books? I think I looked at Margin of Safety a year ago and it was $800

[fisherh]

Swedish, this is perfect timing. You are the best! Seth is one of my favorite investors. You made my day Swedish. Thankyou!!

[faustocatalano]

Love you swedish. I follow you from argentina, can't wait to see the next one

[justahumanwithamask]

I always wondered how this guy consistently finds new books to read

[BabySn_]

Hello sir, will you ever share your portfolio with us, your followers and supporters? Your content is life changing for many of us and so I was wondering if you could do that. Many thanks 🙏

[kike]

Love your content! Which platform you use to create your videos? I would like to learn how to use it!

[civili]

Thank you for sharing this with us Swedish investor. I wonder, what software do you use to create these nice animations of yours?

[johnchan]

Thanks for the overview of the book. Time to get a copy, somehow, somewhere....