Seth Klarman's Baupost: value investing in a market full of megacaps
A famous value investor who wrote a book about the margin of safety now owns Amazon and Alphabet. Five quarters of the Baupost portfolio and what the word value really means.
Who he is and why people copy him
Seth Klarman has run the Baupost Group in Boston since 1982. He is known for patience, for holding a lot of cash when he cannot find anything cheap, and for his 1991 book Margin of Safety, which became a collector's item because it is out of print and sells for very high prices. Among professionals he is regarded as one of the most careful investors of his generation, with a reputation for protecting capital in downturns.
Baupost does not only buy shares. It also invests in distressed debt, real estate and complicated situations, which is why the shares in its Form 13F are only one part of its capital.
The ideas behind the portfolio
The core of the Klarman approach is the margin of safety: buying only when the price is far enough below a careful estimate of the value that a mistake in the estimate does not cost you money. He insists that the main goal is to avoid permanent loss, not to maximise the return, and that you can always wait for a better opportunity. Cash is therefore not a failure to invest, but an option on future bargains.
He also stresses that investing is mostly about behaviour. The best opportunities appear when others are forced sellers, in a panic or a forgotten corner of the market, and the job is to be calm enough to buy. He distrusts forecasts and relies on the value of the business as the anchor.
What a Form 13F does and does not show
The filing lists the US-listed shares held on the last day of the quarter, and Baupost's $4 to $5 billion of reported shares is a part of its total capital. It does not show cash, bonds, loans, real estate, shares of companies outside the US or private deals, so you cannot tell how cautious the whole portfolio is. For a manager who deliberately holds a lot of cash, this matters more than for most.
It is also a snapshot with a delay of up to 45 days.
The portfolio over the last five quarters
From June 2025 to June 2026 the reported portfolio grew from $4.13 billion to $5.42 billion, with 20 positions at the start and 23 at the end. The ten largest made up 80.0% and then 74.9%: a concentrated but diversified book.
The change in the top is large. In June 2025 the biggest positions were Alphabet (11.3%), Wesco (9.9%), Willis Towers Watson (9.8%), CRH (8.5%) and Fidelity National Information Services (7.5%). A year later the list is led by Amazon (16.5%), followed by Elevance Health (9.1%), Restaurant Brands (9.0%), Alphabet (9.0%), Ferguson (6.4%), Genuine Parts (6.1%) and Union Pacific (6.0%). A value investor now holds a quarter of his reported book in Amazon and Alphabet.
Ten largest positions at the end of the latest quarter (2026-06-30) and the same names at the start of the period (2025-06-30), as a share of the US-listed stocks in the report (23 positions, $5.4 billion in total).
| Position | 2026-06-30 | 2025-06-30 |
|---|---|---|
| Amazon | 16.5% | — |
| Elevance Health | 9.1% | 5.8% |
| Restaurant Brands | 9.0% | 6.5% |
| Alphabet | 9.0% | 11.3% |
| Ferguson | 6.4% | 6.0% |
| Genuine Parts | 6.1% | — |
| Union Pacific | 6.0% | — |
| Visa | 4.4% | — |
| Wesco | 4.2% | 9.9% |
| AON | 4.2% | — |
| Ten largest together | 74.9% | 80.0% |
What changed quarter by quarter
In the quarter to September 2025 Baupost opened Union Pacific (7.4%) and Genuine Parts (4.0%), closed Viasat (3.2%), Liberty Broadband (1.8%), ICON (1.4%) and Amcor (1.2%), and sold about 29% of its Alphabet shares. In the quarter to December it opened Amazon at 9.3% of the portfolio, a very large first position, and cut CRH by about two thirds of its shares, from 8.5% to 2.5%.
In the quarter to March 2026 it opened Aon (4.9%), Visa (4.1%) and Teleflex (3.7%), closed Fidelity National Information Services (5.7%), Dollar General (5.2%), Fiserv (2.8%) and CRH (2.5%), and raised its Amazon shares by 47%. In the quarter to June 2026 it opened CME Group (2.5%), closed Willis Towers Watson (5.1%), cut Wesco by 54% and Union Pacific by 23% and raised Amazon by another 20% and Genuine Parts by 89%. Amazon is the thread through the whole year: an initial large bet, then increases in two more quarters.
Changes between consecutive filings. A share is measured as a part of the reported stock portfolio; it can move because of price changes too, so read it together with the text.
| Quarter end | Positions | Opened | Closed | Biggest rise in share | Biggest fall in share |
|---|---|---|---|---|---|
| 2025-09-30 | 20 → 20 | Union Pacific (7.4%), Genuine Parts (4.0%), Americold Realty Trust (0.9%) | Viasat (3.2%), Liberty Broadband (1.8%), Icon (1.4%) | Restaurant Brands (+4.5 pp) | Wesco (−3.3 pp) |
| 2025-12-31 | 20 → 21 | Amazon (9.3%), Molina Healthcare (2.1%), Grupo Aeromexico (2.0%) | Pagseguro Digital (0.5%), Cable One (0.3%) | Willis Towers Watson (+0.6 pp) | CRH (−5.9 pp) |
| 2026-03-31 | 21 → 22 | AON (4.9%), Visa (4.1%), Teleflex (3.7%) | Fidelity National Information Services (5.7%), Dollar General (5.2%), Fiserv (2.8%) | Amazon (+3.4 pp) | Willis Towers Watson (−3.4 pp) |
| 2026-06-30 | 22 → 23 | CME Group (2.5%), Axalta Coating Sys (0.8%), Pershing Square (0.2%) | Willis Towers Watson (5.1%), Vaxcyte (0.9%) | Amazon (+3.8 pp) | Wesco (−3.5 pp) |
What to take away, and what to doubt
The main lesson is about the meaning of value. Many people think of value investing as buying low price-to-earnings stocks in out-of-favour sectors. Klarman's portfolio shows the original idea: value is the gap between the price and what the business is worth, and the business can be an Amazon as well as an old-line distributor. The second lesson is the speed of change: even a value investor who preaches patience closed positions worth 16% of the book in a single quarter.
What to doubt: the filing hides the cash, so the most characteristic feature of Baupost cannot be seen. And a copy of the shares will not carry the margin of safety, which comes from the price paid, not from the name of the company.
Where it meets our bots
The spirit of capital protection is closest to our bot that holds the twenty calmest stocks and to the permanent portfolio, which keeps a quarter of its money in cash and a quarter in gold. The bot that buys sharp dips in the S&P 500, based on the short RSI rule, is a mechanical relative of the idea of buying when others are selling, but it works on price alone and has no view on value.
These accounts are virtual and public. The guides below describe the rules.
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The RSI(2) strategy: buying sharp dips in an uptrend
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