Like the majority of Baupost's investor correspondence over the years, Baupost's 1994 year-end letter contains some valuable insights. However, the year-end letter is difficult to get hold of in full, although ValueWalk has a copy and some analysis. The 1994 letter is also a gem and we recently saw a copy for the first time.
The market of 1994 has many parallels with today's market environment.
1994 saw a surprise rate hike by the Federal Reserve and the following panic hammered hedge funds, credit funds and foreign exchange traders. The suddenness of the move caught many investors by surprise, unprepared and dangerously exposed. This drove forced selling across...
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