How do you value this company XYZ?

I have been looking at this company.  Its business is doing very well.  It has grown its revenues, profit before tax and earnings consistently over the last few years.  Its business is growing and it is opening new branches in various towns/cities in our country.

Its net profit margins are high (>20%), its ROE is high (> 25%) and it pays about 30%+ of its earnings as dividends.

Its trailing-twelve months earnings was $113.1 million and its market capitalisation recently was $1642 million.


How would you value the earnings and dividends of this company?

Using the thinking similar to that of Buffett:

1.  The risk free interest rate offered by the banks is 4% per year.
2.  How much deposit would you need to put in the bank to earn $113.1 million per year?
3.  Answer:  $113.1 million / 4% = $2827.5 million.
4.  This company pays out 30%+ of its earnings as dividends, i.e. about $40 million.
5.  How much deposit would you need to put in the bank to earn $40 million at present prevailing interest rate of 4% per year?
6.  Answer:  $40 million / 4% = $1000 million.
7.  A fixed deposit gives you a fixed interest rate of the same amount every year, assuming that the interest rate paid remains unchanged.
8.  On the other hand, this company's earnings are expected to grow quite fast in the coming years.
9.  Assuming that this company can grow its earnings at a very low 2% per year for the next few years, with a high degree of predictability, how would you value this company?
10.  Let's continue with the analogy above.
11.  With its earnings of $ 113.1 million, growing at 2% per year, you will need to have a fixed deposit of the equivalent of $ 113.1 million / (4% - 2%) = $ 5655 million.
12.  With its dividend of $ 40 million, growing at 2% per year, you will similarly have to have a fixed deposit of the equivalent of $ 40 million / (4% - 2%) = $ 2000 million.


To summarise:

Assuming no growth in its earnings or dividends, and using 4% risk free interest rate as the discount factor, the present values of
- the earnings stream is the equivalent to an asset of $ 2827.5 million.
- the dividends stream is the equivalent to an asset of $1000 million.

When growth is factored into the earnings and dividends stream, even at a low rate of growth of 2% and still using the 4% risk free interest rate as the discount factor, the present values of:
- the earnings stream is $ 5655 million.
- the dividends stream is $ 2000 million.

This company's market capitalization was $ 1642 million recently.  Assuming no growth in the earnings of this company, the value of this company is anywhere between $1000 million (this price is supported by its dividend yield) and $2827.5 million (supported by its earning yield).

At $ 1642 million, its reward:risk ratio = 64.9%: 35.1%.


Conclusion:

Since, this company is projected to grow its earnings with a high degree of predictability, at its present price of $ 1642 million, those who are buying into this company at the present price, enjoy a large margin of safety.

QMV approach

QMV approach

Q = Quality of the Business
M = Integrity and Efficiency of the Management
V = Value or Valuation

The three most important words in the books of Benjamin Graham

Yes, these are the three most important words in the books of Benjamin Graham.

If you have to take home a message from his thick books, it is knowing everything about "Margin of Safety".

Better still, tattoo these three words to your body, so that you can be reminded every minute of the day. 

Margin of Safety — Your Safety Net

Stock valuation is not an objective science — you cannot just plug in numbers and come up with a price set in stone. There is a lot of subjectivity around it such as your familiarity with the industry and the company, your projections on the future of the company, your evaluation of management competency, etc.

So if the outcome of the valuation process is so uncertain, do we even need to bother doing all the work?

We think it is well worth it. The process forces you to think about and research the company, its structure and functioning, the way it generates cash. We recognize the probabilities associated with the final price. As an added level of protection, we use a margin of safety.

What is Margin of Safety?

Let's consider an example.

When engineers design a bridge, several variables go into their calculations. The bridge needs to hold up against the heaviest load allowed and should also be strong enough to overcome normal wear and tear over the years.

A bad design will lead to failure, which would be disastrous. That's why, when choosing the material and its thickness in the design phase, engineers use what is called a factor of safety to minimize the probability of failure.

So they estimate, for example, the highest load the bridge would encounter. Then they bump this number up by multiplying it with a factor — the factor of safety. Now the bridge may never ever have to bear such load, but it still is designed for that.

A bridge is a complex engineering structure requiring intricate design. What if some of the assumptions in the design were wrong or off target? The factor of safety helps guard against inaccurate assumptions.

In stock investing, margin of safety behaves identically to the factor of safety in mechanical design.

When you value a stock, you use certain assumptions on the future of the company. As time goes by, some of these assumptions will most likely be off. Using a margin of safety on the estimated price helps reduce potential losses.

How Do We Use Margin of Safety?

Let's say you're doing your valuation on a company that owns a chain of restaurants. You come up with a fair price of $25.

Let's also say that you are very familiar with the restaurant business and have actually worked in that field. You've even gone out to eat several times at this particular chain. You feel fairly confident that this restaurant has the potential to continue it's profitable streak.

What price should you buy the stock at?

No matter how well you know the business, the future will not play out exactly like you've assumed. So we don't think you should buy it at $25.

How much of a discount margin should we apply? Since you're pretty familiar with the business and have done good research, you could probably use a discount margin of 20 to 30%. In other words, you could buy the stock for 70 to 80% of your estimated price, which works out to $17.50 to $20.

This 20 to 30% discount is your margin of safety.

The less confident you are in your assumptions, the higher the margin that should be applied. We tend to use 30 to 50% (i.e. we shoot for a price that is 50-80% of our estimated price).

In addition, think of what would happen if your assumptions turn out to be fairly conservative and the company does much better than you assumed. That discount margin now boosts your returns significantly!

In summary, we discussed what exactly margin of safety is and why we need it. We looked at an example to help us apply this concept.

Your discount margin will depend on your familiarity with the company, the quality of its fundamentals, how good its management is, and your projection of its future business growth, among other factors. The more uncertain you think your price estimate is, the higher the margin you should use.

http://www.independent-stock-investing.com/Margin-Of-Safety.html

This strategy is very safe for selected high quality stocks. Margin of Safety Principle

The downside risk is protected through ONLY buying when the price is low or fairly priced.  


Therefore, when the price is trending downwards and when it is obviously below intrinsic value, do not harm your portfolio by selling to "protect your gains" or "to minimise your loss."  


Instead, you should be brave and courageous (this can be very difficult for those not properly wired)  to add more to your portfolio through dollar cost averaging or phasing in your new purchases.  This strategy is very safe for selected high quality stocks as long as you are confident and know your valuation.  It has the same effect of averaging down the cost of your purchase price. 


 However, unlike selling your shares to do so, buying more below intrinsic value ensures that your money will always be invested to capture the long term returns offered by the business of the selected stock.

How exactly do we know the value of the asset? Trust Your Instincts (Common Sense).

"Price is what you pay. Value is what you get."

Leave it to Warren Buffett to sum up the dilemma in a single pithy dichotomy. 


The world's greatest investor reminds us that the value of an asset -- whether a car, a house, or a stock -- does not necessarily have any relation to the price we pay to own it.   


Buffett's observation still leaves us with one crucial question: How exactly do we know the value of the asset?

• Benjamin Graham's classic non-answer stated that an asset is worth at least its book value, so you're safe if you pay less than that. 
• There's also a logically impeccable but not very helpful adage that "an asset is worth whatever someone will pay for it." 
• And Professor Aswath Damodaran offers this math-intensive solution: "The value of equity is obtained by discounting expected [residual] cash flows."

A more honest answer, though, is that we simply never know how much anything is worth. Not exactly, at least.



Yet in real life, we don't allow the lack of an exact answer to stop us from buying. 

• Humans need shelter, so we buy a house when the price seems fair. 
• We need cars, so we work from sticker prices and the Kelly Blue Book to pick an acceptable price for those, too.

The same goes for stocks. We shouldn't "measure with a micrometer, mark it off with chalk, then cut it with an axe." 

• We make our best guess at a fair price (intrinsic value). 
• We try to buy for significantly less (margin of safety) than our estimation. 

If we guess right more often than wrong, we make money. But where do we start?








Start with common sense

Look in places where you're more likely than not to find bargains:

Low prices: Stocks hitting the new 52-week-lows list may be "down for a reason." Still, a stock selling cheaper today than it's sold any time for the past year is more likely a good bargain than a stock selling for more than it's ever fetched before. 

Read the paper: Newspaper headlines offer another superb place to seek bargains. Remember how oil was selling for $150 a barrel last July? Remember how a few months later, it sold for less than $40? How much do you want to bet that the intrinsic values of oil majors such as ExxonMobil (NYSE: XOM) or Chevron (NYSE: CVX) tracked those movements exactly? (Hint: They didn't.) Somewhere between $40 and $150, there was value to be had in the oil majors.

Cheap valuations: Another great way to scan for bargains is to run a stock screener every once in a while. I like to look for stocks that trade for low price-to-free cash flow multiples, exhibit strong growth, and have low debt. 


The key point I want you to take away from all this is simple: Trust your instincts.

• When Zillow tells you your house has doubled in value, treat that "Zestimate" with some skepticism. 
• When Suntech Power (NYSE: STP) doubles in price on announcements of industry subsidies from China, be wary. 
• On the other hand, when stocks that have little to do with the financial crisis drop 50% in the space of a year, when stock prices don't match the news they're supposed to reflect, or when you stumble across a stock with a price that looks cheap, you might just have found a bargain.

http://www.fool.com/investing/value/2009/04/25/how-i-lost-100000-without-even-trying.aspx

Value Investing - Margin of Safety

Safety Margin  


Consider a real-life example of a margin of safety. Say you're planning a pyrotechnics show, which will include flames and explosions. You have concluded with a high degree of certainty that it's perfectly safe to stand 100 feet from the center of the explosions. But to be absolutely sure no one gets hurt, you implement a margin of safety by setting up barriers 125 feet from the explosions.

This use of a margin of safety works similarly in value investing. It's simply the practice of leaving room for error in your calculations of intrinsic value. A value investor may be fairly confident that a company has an intrinsic value of $30 per share. But in case his or her calculations are a little too optimistic, he or she creates a margin of safety/error by using the $26 per share in their scenario analysis. The investor may find that at $15 the company is an attractive investment, or he or she may find that at $24, the company is not attractive enough. If the stock's intrinsic value is lower than the investor estimated, the margin of safety would help prevent this investor from paying too much for the stock.

http://www.trade4rich.com/SaftyMargin.html

Margin of Safety

"Confronted with a like challenge to distill the secret of sound investment into three words, we venture the motto, MARGIN OF SAFETY."

- Ben Graham

Efficient Market Hypothesis: Fact Or Fiction? "Efficient" refers to informational efficiency only.

The efficient markets hypothesis (EMH) in all of its forms, whether strong, semi-strong, or weak, is normative, not positive, i.e., it is an assertion about the way markets should behave in an ideal, utopian world, not a statement about the way markets actually do work in the real, practical world. Simple observation shows that the EMH in all its forms is fallacious. Both Kindleberger and Mackay give historical examples of stock market irrationality and inefficiency.

The efficient markets hypothesis may have advanced many academic careers, but it has not demonstrably increased the wealth of any investor over what would have been created otherwise. The EMH and the related capital asset pricing model, as opposed to the operating enterprise valuation model, may be useful as a standard of market perfection in studies of the market as a whole, but not in the valuation or selection of common stocks for investment.

The term "efficient" in the efficient markets hypothesis refers to informational efficiency only. It does not include mechanical operational efficiency or necessarily societal welfare efficiency.

The EMH explicitly assumes that all market participants have access to the same information in either a strong, semi-strong, or weak sense of the hypothesis.

• This simplifying assumption is chosen because it is necessary for mathematical tractability and thus highly convenient. 
• What makes this assumption unacceptably implausible is the meaning of the term "information" which is often overlooked. 
• Data is not information. Rather, information is data that has been processed and interpreted with judgment based on intelligence, knowledge and experience. 
• Does anyone believe that all market participants are endowed equally, not with access to data, but with the same intelligence, knowledge and experience? 

Competitive, properly-regulated markets may approach the semblance of "data efficiency" in the relative sense of eliminating arbitrage opportunities subject to trading costs and taxes, but no market is efficient in any absolute sense of equating price at all times to intrinsic economic value. This margin between value and price is the major key to successful value investing.

Margin of Safety

Intrinsic value is independent of the market and current quoted price. 


It is the absolute standard against which all market prices are compared. 

• Thus with the method of valuation, companies are considered neither under-valued nor over-valued relative to the stock market. 

This would be bringing truth to error for correction, a backward approach. 

• Rather, common stock issues are considered either under-priced or over-priced in the market relative to the intrinsic value of their companies. 

This brings error to truth for correction. 

• To identify mispriced stocks, the value of a company is compared to its stock market price.

The concept of price is not without ambiguity. 

• We can choose among closing price, opening price, asking price, bidding price, actual price of latest trade for any number of shares, or actual price of latest trade for the same number of shares in the contemplated transaction.

Thus we focus on the important concept of safety margin rather than emphasize price with its potential quick and large changes from one transaction to the next. 

• The variability of the price of a stock in part represents mispricing by the market. 
• Such lack of convergence of market price to intrinsic value, however transient, represents market inefficiency. 
• The irrationality of the stock market has been observed by de la Vega, John Maynard Keynes, Kindleberger, Lefèvre, Mackay, and others.

John Maynard Keynes in his General Theory (Book IV "The Inducement to Invest", Chapter 12 "The State of Long-Term Expectation", Section V, pages 156-157) introduced the metaphor of newspaper photograph competitions to explain the working of the stock market. 

• His explanation emphasized anticipation of the opinions of other market participants and the resulting infinite regress, i.e., I think that he thinks that I think that he thinks, ad infinitum. 
• This stresses that market prices are determined by opinion.

Safety margin represents an excess of intrinsic value over market price, or alternately, a discount of price below intrinsic value. 

• A safety margin of at least twenty percent is desirable. 
• Intrinsic value is what a company would be worth to a private owner independent of the stock market and its daily quotations. 
• The concept of a margin of safety was introduced by Graham and Dodd in Security Analysis. 

It is more important to wait for a favorable buy price than to be dependent on fortuitous timing to realize a profitable sell price. 

• A buy and hold approach involves more than the platitudinous adage to "buy low and sell high." 
• The margin of safety requires knowing when the buying price is low in absolute terms rather than merely relative to the market as a whole.

http://www.numeraire.com/margin.htm

Price is not value, pricing is not valuation, and pricing models are not valuation models.

A valuation model is an effective method for estimating economic value.


Another term that is used to refer to economic value is "fundamental value", which derives the quantity of value from so-called fundamental economic metrics generated by a firm at the firm-level, in contrast to pricing metrics generated by a securities market at the security-level. 


Price is not value, pricing is not valuation, and pricing models are not valuation models. 


The conventional academic capital asset pricing model has one factor, the beta coefficient. 

• Models that include beta are pricing models, not valuation models. 
• This is not merely a matter of semantics. 

The difference between price and value, referred to as the margin of safety, is the raison d'etre of investment valuation independent of market pricing.


http://www.numeraire.com/value.htm

The investor's concept of a margin of safety

 The investor's concept of a margin of safety rests upon a simple and definite arithmetical reasoning from statistical data.

1. There is no guarantee that the fundamental quantitative approach will be successful in the future, but no reason for pessimism. 
2. "To have a true investment there must be present a true margin of safety." 

"It is our argument that a sufficiently low price can turn a security of mediocre quality into a sound investment opportunity--provided

• that the buyer is informed and experienced and 
• that he practices adequate diversification. 

For if the price is low enough to create a substantial margin of safety, the security thereby meets our criterion of investment.


http://www.conscious-investor.com/books/intelligentinvestor.pdf

HOW WARREN BUFFET DETERMINES A FAIR PRICE

The real secret of Warren Buffett is the methods that he uses, some of which are known from his remarks, and some of which are not, that allow him to predict cash flows with some probability.

Various books about Warren Buffett give their explanations as to how he calculates the price that he is prepared to pay for a share with the desired margin of safety.

• Mary Buffett and David Clarke pose a series of tests, based on past growth rates, returns on equity, book value and government bond price averages.
• Robert G Hagstrom Jnr in The Warren Buffet Way gives explanatory tables of past Berkshire Hathaway purchases using a DCF model and owner earnings.

Ultimately, the investor must decide upon their own methods of arriving at the intrinsic value of a share and the margin of error that they want for themselves.

INTRINSIC VALUE: THE RIGHT PRICE TO PAY

INTRINSIC VALUE

Both Warren Buffett and Benjamin Graham talk about the intrinsic value of a business, or a share in it.  That is, to buy a business, or a share in it, at a fair price. 

But, having regard to the possibility of error in calculating intrinsic value, the careful of investor should provide a margin of error by only buying the business, or shares, at a substantial discount to the intrinsic value.

Buffett is said to look for a 25 per cent discount, but who really knows?

DEFINING INTRINSIC VALUE

Buffett’s concept, in looking at intrinsic value, is that it values what can be taken out of the business. 

He has quoted investment guru John Burr Williams who defined value like this:

‘The value of any stock, bond or business today is determined by the cash inflows and outflows – discounted at an appropriate interest rate – that can be expected to occur during the remaining life of the asset.’ – The Theory of Investment Value.

The difference for Buffett in calculating the value of bonds and shares is that the investor knows the eventual price of the bond when it matures but has to guess the price of the share at some future date.

BENJAMIN GRAHAM - THE MARGIN OF SAFETY

Benjamin Graham tells us that investment policy can be reduced to three simple words: "Margin of Safety" - the price at which a share investment can be bought with minimal downside risk.

The important point here is that the margin of safety price is not the same as the price that an investor calculates a share to be intrinsically worth.

THE INTRINSIC VALUE OF A SHARE

An investor may calculate the intrinsic value of a share by differing methods and will eventually come up with a price that he or she believes represents good buying value. Graham had his methods of calculating intrinsic value, Warren Buffett has his, other successful investors have theirs.

Graham acknowledges, however, that calculations may be wrong, or that external events may take place to affect the value of the share. These cannot be predicted. For these reasons, the investor must have a margin of safety, an inbuilt factor that allows for these possibilities.

PRIME BONDS VS GOVERNMENT BONDS

For Benjamin Graham, the benchmark for calculating the margin of safety was the interest rate payable for prime quality bonds. As Graham wrote in an era when prime bonds were much more prominent, it is more practical now to adopt, as Warren Buffett apparently does, the rate of return of government bonds as the benchmark.

Graham then uses a comparative approach. If the risk in two forms of investment is the same, then it must be better to take the investment with the higher return. Conversely, an investment with higher risk, such as shares, should, when calculating the margin of safety, have a higher return

EXAMPLE

Modifying then the example that Benjamin Graham uses in his book, we can take a share investment that is yielding 10 per cent earnings. For example, company A is earning 90 cents per share and is selling in the market at 10 dollars. If the rate of return on government bonds is 5 per cent, then the share is yielding annually an excess of 5 per cent. Over a period of ten years, the excess yield will total about 50 per cent, which, in Graham’s opinion, may be enough, if the share investment was wisely chosen in the first place. Of course, the total margin of safety will fluctuate depending upon the quality of the share investment.

Even so, something may go wrong. Graham believes however, that, with a diversified portfolio of 20 or more representative share investments, the margin of error approach will, over time, produce satisfactory results.

 ACCORDING TO BENJAMIN GRAHAM:

"[To] have a true investment, there must be a true margin of safety. And a true margin of safety is one that can be demonstrated by figures, by persuasive reasoning, and by reference to a body of actual experience".

http://www.buffettsecrets.com/margin-of-safety.htm

Warren Buffett Secrets

http://www.buffettsecrets.com/index.htm

Unlike return, risk is no more quantifiable at the end of an investment than it was at its beginning.

While security analysts attempt to determine with precision the risk and return of investments, events alone accomplish that.

Unlike return, however, risk is no more quantifiable at the end of an investment than it was at its beginning.

Risk simply cannot be described by a single number.  

Intuitively we understand that risk varies from investment to investment:  a government bond is not as risky as the stock of a high-technology company. But investments do not provide information about the risks the way food packages provide nutritional data.

Rather, risk is a perception in each investor's mind that results from analysis of the probability and amount of potential loss from an investment.

• If exploratory oil well proves to be a dry hole, it is called risky.  If a bond defaults or a stock plunges in price, they are called risky.  
• But if the well is a gusher, the bond matures on schedule, and the stock rallies strongly, can we say they weren't risky when the investment was made?  

Not at all.  The point is, in most cases no more is known about the risk of an investment after it is concluded than was known when it was made. 


There are only a few things investors can do to counteract risk:

• diversify adequately, 
• hedge when appropriate, and 
• invest with a margin of safety.  

It is precisely because we do not and cannot know all the risks of an investment that we strive to invest at a discount.  The bargain element helps to provide a cushion for when things go wrong.

Value Investment Philosophy

Value investing is the discipline of buying securities at a significant discount from their current underlying values and holding them until more of their value is realized. The element of a bargain is the key to the process. In the language of value investors, this is referred to as buying a dollar for fifty cents. Value investing combines the conservative analysis of underlying value with the requisite discipline and patience to buy only when a sufficient discount from that value is available. The number of available bargains varies, and the gap between the price and value of any given security can be very narrow or extremely wide. Sometimes a value investor will review in depth a great many potential investments without finding a single one that is sufficiently attractive. Such persistence is necessary, however, since value is often well hidden.


The disciplined pursuit of bargains makes value investing very much a risk-averse approach. The greatest challenge for value investors is maintaining the required discipline. Being a value investor usually means standing apart from the crowd, challenging conventional wisdom, and opposing the prevailing investment winds . It can be a very lonely undertaking. A value investor may experience poor, even horrendous , performance compared with that of other investors or the market as a whole during prolonged periods of market overvaluation. Yet over the long run the value approach works so successfully that few, if any, advocates of the philosophy ever abandon it.

A notable feature of value investing is its strong performance in periods of overall market decline.

Whenever the financial markets fail to fully incorporate fundamental values into securities prices, an investor's margin of safety is high.

• Stock and bond prices may anticipate continued poor business results, yet securities priced to reflect those depressed fundamentals may have little room to fall further. 
• Moreover, securities priced as if nothing could go right stand to benefit from a change in perception. If investors refocused on the strengths rather than on the difficulties, higher security prices would result. 
• When fundamentals do improve, investors could benefit both from better results and from an increased multiple applied to them.

Example:


In early 1987 the shares of Telefonos de Mexico, S.A., sold for prices as low as ten cents. The company was not doing badly, and analysts were forecasting for the shares annual earnings of fifteen cents and a book value of approximately seventy-five cents in 1988. Investors seemed to focus only on the continual dilution of the stock, stemming from quarterly 6.25 percent stock dividends and from the issuance of shares to new telephone subscribers, ostensibly to fund the required capital outlays to install their phones. The market ignored virtually every criterion of value, pricing the shares at extremely low multiples of earnings and cash flow while completely disregarding book value.

In early 1991 Telefonos's share price rose to over $3.25. The shares, out of favor several years earlier, became an institutional favorite. True, some improvement in operating results did contribute to this enormous price appreciation, but the primary explanation was an increase in the multiple investors were willing to pay. The higher multiple reflected a change in investor psychology more than any fundamental developments at the company.




Ref:  Margin of Safety by Seth Klarman

Should investors worry about the possibility that business value may decline? Absolutely.

The possibility of sustained decreases in business value is a dagger at the heart of value investing (and is not a barrel of laughs for other investment approaches either). Value investors place great faith in the principle of assessing value and then buying at a discount. If value is subject to considerable erosion, then how large a discount is sufficient?

Should investors worry about the possibility that business value may decline? Absolutely. Should they do anything about it? There are three responses that might be effective.

• First, since investors cannot predict when values will rise or fall, valuation should always be performed conservatively, giving considerable weight to worst-case liquidation value as well as to other methods. 
• Second, investors fearing deflation could demand a greater than usual discount between price and underlying value in order to make new investments or to hold current positions. This means that normally selective investors would probably let even more pitches than usual go by. 
• Finally, the prospect of asset deflation places a heightened importance on the time frame of investments and on the presence of a catalyst for the realization of underlying value. In a deflationary environment, if you cannot tell whether or when you will realize underlying value, you may not want to get involved at all. If underlying value is realized in the near-term directly for the benefit of shareholders, however, the longer-term forces that could cause value to diminish become moot.

Ref:  Margin of Safety by Seth Klarman

Seth Klarman and Margin of Safety

Seth Klarman

Brief Biography

Seth Klarman is a leading value investor. Mr. Klarman is the President of The Baupost Group, a Boston-based private investment partnership which manages over $7bn in assets on behalf of private families and institutions. Founded in 1983, the firm has achieved investment returns of 20% compounded annually. The firm invests in equities, distressed debt, private equity and real estate. Mr. Klarman is notable for his willingness to hold significant amounts of cash in his investment portfolios, sometimes in excess of 50% of the total. In 1991, Mr, Klarman authored Margin of Safety, Risk Averse Investing Strategies for the Thoughtful Investor, which since has become a value investing classic. Now out of print, Margin of Safety has sold on Amazon for $1,200 and eBay for $2,000. Before founding Baupost, Mr. Klarman previously worked for Max Heine and Michael Price of Mutual Shares. Mr. Klarman is a graduate of Cornell University and Harvard Business School.

http://valuestockplus.wordpress.com/seth-klarman/

Click here for a pdf copy of this book.
http://www.my10000dollars.com/MS.pdf