We Study Billionaires - The Investor’s Podcast Network

TIP737: Margin Of Safety by Seth Klarman w/ Kyle Grieve

200 snips
Jul 13, 2025
Dive into the world of value investing, where principles like downside protection take center stage. Learn how to distinguish between speculation and genuine investing, while understanding the pitfalls of Wall Street's incentives. Discover the critical importance of a margin of safety in constructing a portfolio and explore strategies for recognizing undervalued businesses. The conversation also highlights why holding cash can be a tactical advantage and the essential traits of successful value investors. Buckle up for insights that prioritize long-term stability!
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INSIGHT

Speculation vs True Investing

  • Speculative investing focuses on price movements not business fundamentals.
  • Value investing prioritizes cash flow and downside protection over price speculation.
INSIGHT

Fund Managers' Incentive Flaws

  • Fund managers prioritize assets under management over partner returns.
  • This incentivizes matching benchmarks instead of outperforming them.
INSIGHT

Problems with EBITDA Metric

  • EBITDA can mislead by adding back real expenses like depreciation.
  • Depreciation often proxies future capital expenditures essential to maintain the business.
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