📖Seth Klarman
Require Catalysts
Identify catalysts that will unlock value.
Don't just buy cheap stocks; identify catalysts that will realize the value. Without a catalyst, cheap can stay cheap forever.
🏠 Everyday Analogy
📖 Core Interpretation
In Require Catalysts, 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：Catalysts transform cheap stocks into profitable investments.
AI Deep Analysis
Get personalized insights and practical guidance through AI conversation
❓ 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
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.
2
KPN and América Móvil Bid (2013)
Baupost invested in Dutch telecom KPN amid a takeover attempt by América Móvil, expecting bids, asset sales, and regulatory decisions to unlock value.
✨ Outcome：The partial bid and corporate actions highlighted underlying value; position was reportedly profitable as spreads narrowed and risk reduced.
See how masters handle real scenarios?
30 real investment dilemmas answered by legendary investors
Explore Scenarios →