Klarman at CFA Institute

* Klarman sees no gains for stocks this decade * Klarman looking for commercial real estate bargains * No plans to reissue coveted investing guide he wrote (Adds comment on book, background on Baupost) BOSTON, May 18 (Reuters) - Star hedge fund manager Seth Klarman sees few bargains in the current environment and predicted on Tuesday that the stock market could suffer another lost decade without any gains. "Given the recent run-up, I'd be worried that we'll have another 10 years of zero returns," Klarman, who rarely speaks in public, said at the CFA Institute's annual conference in Boston. Current market conditions remind Klarman of a Hostess Twinkie snack cake because "everything is being manipulated by the government" and appears "artificial." "I'm more worried about the world broadly than I've ever been in my whole career," Klarman said. Klarman has 30 percent of assets at his $22 billion Baupost Group in cash, he said. He started the firm in 1982 with $27 million and has averaged 20 percent annual gains ever since. In 2007, amid the depths of the credit crash, Baupost had its best year, gaining 52 percent. Extracted under Fair Use Guidelines US Copyright laws. (CFR) Cheers trading lives on, (I think), Islander

I kind of figured most of that. What really depressed me was . . . . I didn't know Hostess Twinkies were "being manipulated by the government."

Edited by milbank, 18 May 2010 - 01:56 PM.

Islander,

Do you know what the investment style is for these guys in terms leverage? He averaged 20% annually it says, given the market went up 10 times since then you would simply expect him to have some sort of a phenomenal return as long as he avoided large 2000 and 2007 draw downs.

Do they employ some sort of leverage or it is pure perfect asset allocation?

Best, arb


edit: answering my own question a bit about this particular manager.

Edited by arbman, 18 May 2010 - 02:40 PM.