Seth Klarman
Two major advantages:
- In a short-term oriented world we can take a long-term view. Therefore we are able to not care about the level a security trades at in the short-term, and can e.g. buy things that appear unattractive in the short-term while they are cheap, then wait for the market to get the signals it wants (e.g. earnings not as bad as feared) to move into the security and move the price.
- A flexible mandate. Within reason we can do what we want, and therefore deploy capital where assets are most under-valued. We can also use cash as an offensive tool.
Have tried to shift investments to not be dependent on the market e.g. risk arbitrage, spinoffs, corporate distressed debt (favorite activity).
In the morning, fill your inbox with small / messy / illiquid etc. things that are most likely to be mispriced.
Fund is organized around situations most likely to produce opportunities e.g. spinoffs, post-bankrupt equities, rights offerings, privatizations, etc. as these are more likely to be mispriced. Everyone at the fund is a generalist. Silos tend to create more conventional thinking.
The hardest question for any investor is when to sell (criteria has to change over time). Never sell for 100 cents of the dollar...need to sell at 80-90 cents on the dollar to leave something attractive for the next buyer.