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Here's What Super-Investor Seth Klarman Has Been Buying

Selena Maranjian
February 15, 2013

Every quarter, many money managers have to disclose what they've bought and sold, via "13F" filings. Their latest moves can shine a bright light on smart stock picks.

Today, let's look at investing giant Seth Klarman, who founded the Baupost Group hedge fund company back in 1982. Klarman is a successful investor with a lot to teach us. He sticks to his value-investing principles so much that at times he has a large chunk of his assets in cash, not finding sufficient bargains.

Why should you look at Baupost's moves? Well, according to the folks at, it has averaged gains of close to 20% annually since its inception, far outstripping the S&P 500. The company's reportable stock portfolio totaled $3.1 billion in value as of Dec. 31, 2012.

Interesting developments
So what does Baupost's latest quarterly 13F filing tell us? Here are a few interesting details:

The biggest new holdings are American International Group (NYSE: AIG) and Microsoft calls. AIG looks appealing to some, with its recent P/E ratio near 3 and a forward one near 10. It has cut a deal with HSBC to sell insurance products in Europe and parts of the Middle East, and is introducing its new CorporateGuard insurance in Europe as well,which is designed to protect directors of companies in these days of extra attention to corporate governance. Share buybacks at recent low levels are also very promising.

Among holdings in which Baupost increased its stake was Indenix Pharmaceuticals (NASDAQ: IDIX), which is down some 57% over