Margin of Safety (book)

Margin of Safety: Risk-averse Value Investing Strategies for the Thoughtful Investor is a 1991 book written by American investor Seth Klarman, manager of the Baupost Group hedge fund. The book discusses Klarman’s views about value investing, temperance, valuation, portfolio management, among other topics. Klarman draws from the earlier investment book The Intelligent Investor, chapter 20, which is titled "margin of safety", a concept coined in the 1940s by authors Benjamin Graham and David Dodd.

Margin of Safety: Risk-Averse Value Investing Strategies for the Thoughtful Investor
AuthorSeth Klarman
CountryUnited States
LanguageEnglish
SubjectSecurities, Investment
PublisherHarperCollins
Publication date
1991
Pages249
ISBN978-0887305108
OCLC2248345232

History

In 1991, when Seth Klarman was 34 years old, he published Margin of Safety with the publisher HarperCollins. The book initially sold just 5,000 copies for $25 a piece, and it was considered a "flop."[1]

In a 2017 interview with Charlie Rose, Klarman considered re-issuing a limited edition copy of Margin of Safety with proceeds going to charity but was otherwise not interested in reviving the book.[1][2]

In July 6, 2018, a Kindle edition of the book was quietly released to the Amazon website. Within a matter of days, the non-authorized kindle edition of the book went to the #16 spot of "business and investment" section of the online book store.[3] Baupost Group responded to the illegal copy by saying "The Kindle version of Margin of Safety: Risk-Averse Value Investing Strategies for the Thoughtful Investor on Amazon is an unauthorized version being sold in violation of its registered copyright, which is owned by Seth Klarman. Mr. Klarman has not authorized republication of Margin of Safety, electronically or in any other format. Our legal department is taking and will continue to take appropriate action with respect to this matter."[4] The Kindle edition book appeared to have been suggested by Oceanofpdf.com, an organization that offers free downloads of books online and believes "that knowledge and information should be free and accessible to everyone around the globe.”[4]

Reception and impact

Despite the initial flop, overtime the book has achieved "cultlike" status amongst the value investing community and has been revered as a "bible" of sorts.[1][3] This has caused physical copies of the book to be worth to $500-$2,500 a piece.[1][4] The high price of the book has resulted in piracy of the book.[1]

The book has featured in a number of recommended reading lists in the investment press.[5][6][7]

See also

References
  1. Ha, Thu-Huong; Ha, Thu-Huong. "Why an out-of-print investment book gets bootlegged and sells for $3,000". Quartz. Retrieved 2019-02-15.
  2. Jarvis (2017-03-03), Seth Klarman Interview with Charlie Rose - 2017, retrieved 2019-02-15
  3. Patterson, Michael (July 10, 2018). "Seth Klarman Book That Sells for $2,500 Is Now $9.99 on Kindle". Bloomberg. Retrieved February 14, 2019.
  4. Kim, Tae (2018-07-10). "Seth Klarman's investing classic 'Margin of Safety' gets pirated on Kindle". CNBC. Retrieved 2019-02-15.
  5. 'Fund managers' favourite investment books', Investors Chronicle (13 March 2013).
  6. Patrick Commins, 'Do it by the Book', Financial Review (18 January 2013), Smart Investor supplement p. 24.
  7. Vitaliy Katsenelson, 'My Investor Holiday Reading List, Part 1', Institutional Investor (January 2014).
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