📖Seth Klarman
Buy When Others Are Forced to Sell
Forced selling creates the deepest bargains.
The best bargains come when sellers are forced to sell regardless of price — margin calls, fund redemptions, or index rebalancing.
🏠 Everyday Analogy
📖 Core Interpretation
In Buy When Others Are Forced to Sell, Seth Klarman focuses on the gap between price and value. Returns come from paying less than what a business is worth, not from guessing short-term market moves.
💎 Key Insight：Non-economic sellers create price dislocations.
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❓ Why It Matters
Ignoring valuation turns even good companies into poor investments. Overpaying compresses future returns and leaves little margin when assumptions are wrong.
🎯 How to Practice
Estimate intrinsic value with conservative assumptions, set clear buy ranges, and act only when price offers a meaningful discount with acceptable downside.
⚠️ Common Pitfalls
Confusing a low price with true cheapness
Using one metric without business context
Overly optimistic assumptions that erase margin of safety
📚 Case Studies
1
RJR Nabisco Post-LBO Debt (1988)
Following KKR’s leveraged buyout of RJR Nabisco, many investors dumped the overlevered company’s bonds amid fears of default and recession.
✨ Outcome：As fundamentals stabilized and cash flows covered interest, bond prices recovered sharply, providing strong returns to investors who purchased during the panic.
2
Vivendi Asset Sales (2012)
Klarman’s Baupost took a position in Vivendi as it pursued asset divestitures, including Activision Blizzard and Maroc Telecom, to unlock conglomerate discount.
✨ Outcome：Catalysts realized through sales and restructuring narrowed the discount; Baupost exited with a substantial gain over several years.
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