Seth Klarman 2018 Letter: Balancing Risk Aversion With Risk-Taking

According to Seth Klarman’s 2018 letter to investors (stay tuned for more coverage), despite the “treacherous” market environment of 2018, his hedge fund, the Boston-based Baupost, “successfully protected” investors’ capital, a result that is undoubtedly a determination of the firm’s desire to limit risk above all else.

The art of portfolio management is balancing risk aversion with risk-taking Klarman opines in his year-end letter to investors. In uncertain markets dominated by speculation, uncertainty, and technological disruption, investors are like “sailors” navigating the “turbulent” waters between “Scylla and Charybdis,” the monsters that inhabit the Straits of Messina, the narrow sea between Sicily and the Italian mainland...