Latest news with #BaupostGroup
Yahoo
6 days ago
- Business
- Yahoo
Investing legend Seth Klarman talks about how his hedge fund is using AI: 'Essentially a capable assistant'
Seth Klarman says AI is used at his firm as a time-saving tool, not for stock picking. AI has helped analyze corporate filings, for example, he said. Firms like Morgan Stanley and Bank of America have also started to incorporate AI to boost productivity. Artificial intelligence may one day upend whole industries, but among the hedge fund elite, it's not yet a threat, investing legend and Baupost Group CEO Seth Klarman said. In an episode of Columbia Business School's Value Investing with Legends podcast this month, the hedge fund titan said he and his colleagues mostly use the nascent technology as a time-saver, assigning it tasks that lower-level staffers may have done in the past. "We have ourselves started using it as essentially a capable assistant, a summer intern," Klarman said. "Not somebody who knows which stocks to buy, but a way to tabulate data quicker." Klarman cited a couple of specific examples of how his colleagues have used it. One way was to analyze corporate filings. "He asked AI to take a look at 10 years of annual reports for a company and compare what changed in the annual report from year to year — the way they communicate, which may reveal something about the change in the business, or what the lawyer was worried about, or whatever it might be," Klarman said. Another was to identify company logos that one of his employees had never seen that would help them know an industry landscape better. "He would have run that to an intern, but AI did it in like five minutes and saved three days' worth of work," Klarman said. Klarman also said he's been using AI himself, though he hasn't been particularly impressed. Before he was set to speak at an event with a well-known business executive, he asked a chatbot to generate some questions to ask the person. "What came back was useless," he said. "I like to ask things that they haven't thought about before." Baupost isn't the only firm using AI to increase efficiency. Morgan Stanley and Bank of America have started to train staff to use the technology to boost productivity. Consulting firm ThoughtLinks found in a recent study that by 2030, 44% of a bank's tasks, including 32% of sales and trading work, could be "redefined" by AI. Despite using the technology, Klarman said he's concerned that AI could hurt people's ability to be creative. A recent MIT study backed this up, finding that using AI reduced memory and brain activity. "I think that if we use AI the wrong way, we'll solve the problem without having applied our brains," Klarman said. "It would be like reading the end of a novel and then not needing to really know as well how did the whole thing come about? So I like doing it in order. I think the right order is, 'Here's what I think,' and then I can improve my thinking." Read the original article on Business Insider
Business Insider
7 days ago
- Business
- Business Insider
Investing legend Seth Klarman talks about how his hedge fund is using AI: 'Essentially a capable assistant'
Artificial intelligence may one day upend whole industries, but among the hedge fund elite, it's not yet a threat, investing legend and Baupost Group CEO Seth Klarman said. In an episode of Columbia Business School's Value Investing with Legends podcast this month, the hedge fund titan said he and his colleagues mostly use the nascent technology as a time-saver, assigning it tasks that lower-level staffers may have done in the past. "We have ourselves started using it as essentially a capable assistant, a summer intern," Klarman said. "Not somebody who knows which stocks to buy, but a way to tabulate data quicker." Klarman cited a couple of specific examples of how his colleagues have used it. One way was to analyze corporate filings. "He asked AI to take a look at 10 years of annual reports for a company and compare what changed in the annual report from year to year — the way they communicate, which may reveal something about the change in the business, or what the lawyer was worried about, or whatever it might be," Klarman said. Another was to identify company logos that one of his employees had never seen that would help them know an industry landscape better. "He would have run that to an intern, but AI did it in like five minutes and saved three days' worth of work," Klarman said. Klarman also said he's been using AI himself, though he hasn't been particularly impressed. Before he was set to speak at an event with a well-known business executive, he asked a chatbot to generate some questions to ask the person. "What came back was useless," he said. "I like to ask things that they haven't thought about before." Baupost isn't the only firm using AI to increase efficiency. Morgan Stanley and Bank of America have started to train staff to use the technology to boost productivity. Consulting firm ThoughtLinks found in a recent study that by 2030, 44% of a bank's tasks, including 32% of sales and trading work, could be "redefined" by AI. Despite using the technology, Klarman said he's concerned that AI could hurt people's ability to be creative. A recent MIT study backed this up, finding that using AI reduced memory and brain activity. "I think that if we use AI the wrong way, we'll solve the problem without having applied our brains," Klarman said. "It would be like reading the end of a novel and then not needing to really know as well how did the whole thing come about? So I like doing it in order. I think the right order is, 'Here's what I think,' and then I can improve my thinking."
Bloomberg
08-07-2025
- Business
- Bloomberg
Baupost-Backed Tile Importer Files for Bankruptcy, Seeks Sale
Mosaic Cos., which sells tile and stone flooring, filed for bankruptcy with plans to sell its operations after the company's main backer, an affiliate of investment giant Baupost Group, was unable to help the business navigate import problems that began during the Covid-19 pandemic. Most of the tile and stone the company sells through design studios and home-improvement stores are imported, which exposed Mosaic to the shipping disruptions that snarled supply chains during the pandemic and the years that followed, the company said Tuesday in a court filing.
Yahoo
21-06-2025
- Business
- Yahoo
Billionaire Seth Klarman Holds Just 1 "Magnificent Seven" Stock in His Hedge Fund's Portfolio -- and He Just Bought More
Seth Klarman is a staunch proponent of value investing, but he remains flexible in that approach. The Magnificent Seven stocks are expensive as a group, with most of them trading at a P/E above 30. This stock has been held down by multiple challenges, but the price is too attractive to pass up. 10 stocks we like better than Alphabet › Seth Klarman is a well-respected value investor with a global following. And there's good reason for that. His Baupost Group hedge fund returned an average of 20% per year over the first 30 years of its existence. That performance comes despite value stocks falling well out of favor over the last decade. But Klarman and his team emphasize that they "remain flexible in their application" of value investing. That means investing in stocks that are mispriced relative to their value, even if they won't show up on any stock screeners for deep value based on traditional metrics. As a result, this method can end up with some stocks that many investors would consider growth stocks, such as those found in the Magnificent Seven. But Klarman only sees one member of the vaunted group of trillion-dollar stocks as worth his and his investors' money, and he just added more of it to Baupost's portfolio. The Magnificent Seven is a group of stocks full of interesting opportunities for the right investor. And anyone who invested in any or all of them is probably happy with their returns over the last couple of years. But a few may not present the value necessary for an investment from someone like Klarman. As a group, they're relatively expensive based on traditional valuation standards. Four of the seven sport forward P/E ratios above 30, including Tesla (NASDAQ: TSLA) with its 168 times multiple. While Tesla could prove worth the price with its plans for a robotaxi service and humanoid robots, there's a lot of risk in buying the stock at its current price, especially as its core car business is facing stiff competition abroad. The other high-priced members are growing quickly and on relatively solid footing, but it's hard to argue they're a bargain at their current prices. But one member of the group trades for a valuation below the S&P 500's average, and that's kind of surprising for a stock with such strong growth potential. The stock has consistently traded at or near the lowest valuation of the Magnificent Seven, giving investors plenty of opportunities. That's why Klarman and his team have built up a position in Alphabet (NASDAQ: GOOG) (NASDAQ: GOOGL), including adding 652,000 more shares in the first quarter, increasing its stake in the company by 46%. There are good reasons for Alphabet to trade at a lower valuation than the rest of the group. It carries some significant risks. The first big risk facing Alphabet is regulatory risk. The company faces several lawsuits in the U.S. and elsewhere that could result in interventions to reduce any monopolistic powers, particularly in web search and digital advertising. That could include things like selling its Chrome browser or its ad marketplace and ending agreements like its $20 billion per year traffic acquisition partnership with Apple. Despite those risks, the impact on Alphabet's operations could be muted given the strength of its brand and product. That's where the second risk comes in. Many see artificial intelligence (AI) chatbots like OpenAI's ChatGPT eating into Google's dominance of web search. In a hearing last month, Apple's Senior VP for Services, Eddy Cue, suggested iPhone users are searching less in 2025 and spending more time in AI apps. However, the data from Alphabet doesn't support the narrative that it's losing significant share to AI. In fact, AI may be a boon to its search business thanks to three new features the company's introduced to leverage the power of large language models. Its AI Overviews (and now AI Mode) have led to increased user engagement and satisfaction, as users expand the search queries they send to Google. Importantly, management says it's able to monetize searches with AI Overviews at the same rate as searches without it. Two other AI-powered features driving search are circle-to-search and Google Lens, which have increased valuable product searches on Google. One piece of Alphabet's business that has seen very strong results without much regulatory threat is its Google Cloud platform. The cloud computing segment is seeing strong demand fueled by AI, which pushed its revenue 28% higher year over year in the first quarter. Moreover, its operating margin expanded to 17.8% from just 9.4% last year, and there's still significant upside from there. Alphabet is also home to "Other Bets," which includes the leading self-driving car company, Waymo. Waymo's made significant progress in its robotaxi business and remains years ahead of the next closest competitor. It now completes 250,000 paid trips per week, as of its most recent update at the start of May. As the market expands, Waymo could prove a significant growth driver for the company. All this is to say, the company as a whole should conservatively be able to produce double-digit revenue growth for the foreseeable future despite the regulatory and competitive challenges it faces. And as Google Cloud and Waymo scale, they should enable even faster earnings growth. At a forward P/E close to 18, Alphabet's stock looks like a bargain among the Magnificent Seven. It's no wonder Klarman and his team have continued to add shares around this price. Before you buy stock in Alphabet, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and Alphabet wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $659,171!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $891,722!* Now, it's worth noting Stock Advisor's total average return is 995% — a market-crushing outperformance compared to 172% for the S&P 500. Don't miss out on the latest top 10 list, available when you join . See the 10 stocks » *Stock Advisor returns as of June 9, 2025 Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. Adam Levy has positions in Alphabet and Apple. The Motley Fool has positions in and recommends Alphabet, Apple, and Tesla. The Motley Fool has a disclosure policy. Billionaire Seth Klarman Holds Just 1 "Magnificent Seven" Stock in His Hedge Fund's Portfolio -- and He Just Bought More was originally published by The Motley Fool Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Globe and Mail
21-06-2025
- Business
- Globe and Mail
Billionaire Seth Klarman Holds Just 1 "Magnificent Seven" Stock in His Hedge Fund's Portfolio -- and He Just Bought More
Seth Klarman is a well-respected value investor with a global following. And there's good reason for that. His Baupost Group hedge fund returned an average of 20% per year over the first 30 years of its existence. That performance comes despite value stocks falling well out of favor over the last decade. But Klarman and his team emphasize that they "remain flexible in their application" of value investing. That means investing in stocks that are mispriced relative to their value, even if they won't show up on any stock screeners for deep value based on traditional metrics. As a result, this method can end up with some stocks that many investors would consider growth stocks, such as those found in the Magnificent Seven. Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Learn More » But Klarman only sees one member of the vaunted group of trillion-dollar stocks as worth his and his investors' money, and he just added more of it to Baupost's portfolio. The only Magnificent Seven stock Klarman likes The Magnificent Seven is a group of stocks full of interesting opportunities for the right investor. And anyone who invested in any or all of them is probably happy with their returns over the last couple of years. But a few may not present the value necessary for an investment from someone like Klarman. As a group, they're relatively expensive based on traditional valuation standards. Four of the seven sport forward P/E ratios above 30, including Tesla (NASDAQ: TSLA) with its 168 times multiple. While Tesla could prove worth the price with its plans for a robotaxi service and humanoid robots, there's a lot of risk in buying the stock at its current price, especially as its core car business is facing stiff competition abroad. The other high-priced members are growing quickly and on relatively solid footing, but it's hard to argue they're a bargain at their current prices. But one member of the group trades for a valuation below the S&P 500 's average, and that's kind of surprising for a stock with such strong growth potential. The stock has consistently traded at or near the lowest valuation of the Magnificent Seven, giving investors plenty of opportunities. That's why Klarman and his team have built up a position in Alphabet (NASDAQ: GOOG)(NASDAQ: GOOGL), including adding 652,000 more shares in the first quarter, increasing its stake in the company by 46%. The best value among the Magnificent Seven There are good reasons for Alphabet to trade at a lower valuation than the rest of the group. It carries some significant risks. The first big risk facing Alphabet is regulatory risk. The company faces several lawsuits in the U.S. and elsewhere that could result in interventions to reduce any monopolistic powers, particularly in web search and digital advertising. That could include things like selling its Chrome browser or its ad marketplace and ending agreements like its $20 billion per year traffic acquisition partnership with Apple. Despite those risks, the impact on Alphabet's operations could be muted given the strength of its brand and product. That's where the second risk comes in. Many see artificial intelligence (AI) chatbots like OpenAI's ChatGPT eating into Google's dominance of web search. In a hearing last month, Apple's Senior VP for Services, Eddy Cue, suggested iPhone users are searching less in 2025 and spending more time in AI apps. However, the data from Alphabet doesn't support the narrative that it's losing significant share to AI. In fact, AI may be a boon to its search business thanks to three new features the company's introduced to leverage the power of large language models. Its AI Overviews (and now AI Mode) have led to increased user engagement and satisfaction, as users expand the search queries they send to Google. Importantly, management says it's able to monetize searches with AI Overviews at the same rate as searches without it. Two other AI-powered features driving search are circle-to-search and Google Lens, which have increased valuable product searches on Google. One piece of Alphabet's business that has seen very strong results without much regulatory threat is its Google Cloud platform. The cloud computing segment is seeing strong demand fueled by AI, which pushed its revenue 28% higher year over year in the first quarter. Moreover, its operating margin expanded to 17.8% from just 9.4% last year, and there's still significant upside from there. Alphabet is also home to "Other Bets," which includes the leading self-driving car company, Waymo. Waymo's made significant progress in its robotaxi business and remains years ahead of the next closest competitor. It now completes 250,000 paid trips per week, as of its most recent update at the start of May. As the market expands, Waymo could prove a significant growth driver for the company. All this is to say, the company as a whole should conservatively be able to produce double-digit revenue growth for the foreseeable future despite the regulatory and competitive challenges it faces. And as Google Cloud and Waymo scale, they should enable even faster earnings growth. At a forward P/E close to 18, Alphabet's stock looks like a bargain among the Magnificent Seven. It's no wonder Klarman and his team have continued to add shares around this price. Should you invest $1,000 in Alphabet right now? Before you buy stock in Alphabet, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Alphabet wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $659,171!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $891,722!* Now, it's worth noting Stock Advisor 's total average return is995% — a market-crushing outperformance compared to172%for the S&P 500. Don't miss out on the latest top 10 list, available when you join Stock Advisor. See the 10 stocks » *Stock Advisor returns as of June 9, 2025 Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. Adam Levy has positions in Alphabet and Apple. The Motley Fool has positions in and recommends Alphabet, Apple, and Tesla. The Motley Fool has a disclosure policy.
