The Six Elements of Intelligent Investing 37teachings look to Warren Buffett and his activities over the past 40
years.
People who are notable in value investing include:- Seth Klarman. Klarman is founder of the hedge fund Baupost
Group. Klarman keeps a very low profile, and it ’ s hard to fol-
low his progress without keeping tabs on his Securities and
Exchange Commission filings. Since 1983, Klarman has aver-
aged annual returns of approximately 20 percent. While this
figure might not be precise, what is beyond dispute is that
Klarman ’ s multiyear performance has vastly exceeded that of
the general market. Today, Klarman manages over $ 1 billion
(up from less than $ 30 million when he started in the early
1980s). Widely regarded as a student of Graham and Buffett
and the value approach, Klarman has done exceedingly well
during both bull and bear markets. - Eddie Lampert. Lampert started a hedge fund in his 20s
after a successful career at Goldman Sachs. His earliest inves-
tors included Michael Dell and David Geffen. His fund,
ESL Investments, produced annualized returns of over 30
percent since 1988. His investment approach is best char-
acterized as concentrated value, as Lampert typically makes
a handful of big investment bets. Lampert is currently
the chairman of Sears Holding, the product of a merger
between Sears and Kmart that Lampert orchestrated earlier
this decade. Currently ESL Investments owns 50 percent
of Sears Holdings. As a retailer, Sears has been struggling,
but Lampert ’ s loyal followers see Sears as a new Berkshire
Hathaway, which was once a textile mill before becoming
Buffett ’ s investment vehicle. - Peter Lynch. While no longer actively managing money,
Lynch is widely considered one of the greatest mutual fund
managers of all time. Rarely referred to as a value investor
according to the rigid definition of the term, Lynch none-
theless created enormous value for his investors as manager
CH003.indd 37CH003.indd 37 9/2/09 11:07:03 AM9/2/09 11:07:03 AM