Margin of Safety

Side-by-side desks stood in the brother's office.

One held the business book, Margin of Safety, and the other held Brave New World.

Driving back to his house, we were talking about marriage, or really about some of our friends' marriages.

There had been a run of divorces in his mountain set.

Seth Klarman is a legendary value investor with some $25 billion 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 costs $2,000 to get from Amazon.

One can only speculate of why Mr. Klarman decided not to make a second edition.

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Takeaway number one, what's the difference between a value investor and a speculator? Seth Klarman is clearly influenced by Warren Buffett and Benjamin Graham.

He even chose to name his book from Graham's concept, The Margin of Safety.

As such, he is a value investor down to the core.