The Secret to Safely Investing in Biotech

Seth Klarman was prescient in recognizing that the genomics revolution would supercharge the biotech industry.

Seth Klarman, who has managed the Baupost Group hedge fund since its founding 33 years ago, is a legendary value investor. A sign of the esteem in which he is held is that Margin of Safety, which he wrote in 1991, has become a cult classic. Warren Buffett is rumored to keep a copy near his desk; if you want your own copy, the book, which is out of print, will set you back $1,940 on Amazon. So it has come as something of a shock to Klarman’s bargain-hunting devotees that their hero has emerged in recent years as a wildly successful investor in biotechnology stocks. Biotech? Buffett never touches the stuff. What does Klarman see that the master doesn’t?

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Andrew Feinberg
Contributing Columnist, Kiplinger's Personal Finance
Feinberg manages a New York City-based hedge fund called CJA Partners.