Sunday, July 30, 2006

Margin of Safety

Value investors: the August 7 issue of BusinessWeek contains an article on Seth Klarman's "out-of-print investing classic", Margin of Safety. The article is entitled, "The $700 Used book".

The book, published in 1991 but never revised or reprinted, now carries quite a premium in the used-book market. At the time of publication, copies at Amazon.com were offered from $700 up to $2,500. Currently, it seems the bid has been upped at the lower end of the scale; the cheapest copy on offer at Amazon lists for $1,285.95.

What's all the hype about? I'm not sure since I've never read the book. But Klarman's reputation as a successful investor has solidified over time, thanks to his Baupost Group's cumulative return, since inception, of 6,133% after fees.

Here's a link to one reader's notes on Margin of Safety, for those who'd like a preview.

A growing number of investors and investing enthusiasts seem to be flocking to the wisdom found in Klarman's book. According to BusinessWeek's article, "University libraries report it as one of their most wait-listed titles as well as one most claimed as lost".

I guess that means that anyone buying an ex-libris copy of Margin of Safety should check to make sure that the seller isn't supplying you with a book marked "lost" from a library's collection. If anyone else has read a copy of it, feel free to give us a report.

Related posts:

1. Seth Klarman: Margin of Safety (pdf).

2. Seth Klarman: Lessons of 2008.
  
Subscribe to our free email newsletter. You can follow our real-time updates on Twitter.