Margin-of-safety

This is a superb introduction to lucrative opportunities in securities which you are not likely to read about in the popular press. The common denominator amongst all the opportunities is VALUE --getting a dollar's worth of goods for 50 cents or so. Although the book was published originally in 1991, most of the priniciples Seth Klarman expounds are timeless. In fact, his discussion of thrift conversions (p. 182-189) is about the only portion of the book which is more or less outdated.

The book's only flaw is that the third section of the book, "The Value Investment Process", which discusses the search for value opportunities in spin-offs, arbitrage, rights offerings and bankruptcies, is not as detailed as value-investing neophytes are likely to want. Still, it's a great start to anyone looking for alternatives to momentum-buying in securities.

Few people outside the value investment arena know who the author is, but take my word for it: he's an investment superstar. Seth runs a private investment firm in Cambridge, MA called the Baupost Group, and isn't soliciting your money! Klarman is on par with Buffett, Ruane & Cuniff, et. al. His book is a MUST read for it's intelligent, frank discussion of intrinsic value investing. Don't look for this book if you're long E-Bay right now. You can probably find the book in a large library, I would look for it if you already found your way to this review!