 There is one thing I really hate and that's filling in forms and bureaucracy. Especially those forms from the financial authorities where you have a bunch of pages, 250 questions, you have to fill in codes, Q-Sips and those all those kinds of things really gets me crazy. However, there is a very good side of that. I have to do it. All other hedge fund managers have to do it too. And 45 days after every quarter, I can see what have they been buying. So, today I'm going to go through Seth Claremont's Baupost Group portfolio. If you don't know who Seth Claremont is, he's the less famous of the greatest investors out there. From 1983 he has had returns between 20 and 30% per year with his Baupost Group. He's a value investor and he's the author of the book Margin of Safety. You can buy it on Amazon for about a thousand bucks. Yes, a thousand. You can also check my video about Seth Claremont's rules for investing success. And as I have the book and I know it's very expensive on Amazon and it's better to invest that money in stocks, I'll probably make a few videos that summarize chapter per chapter of the book. So, please subscribe for more content. So, let's look into Seth Claremont's portfolio. Of course, this is the SEC 14F filing, so only his US portfolio positions are disclosed. Important to note is that this is about 28% of his total funds portfolio. Also, he has approximately 25% of the portfolio in cash. And his average cash position over time, 35 years, has been 33%. 33% in cash. So, he's always heavily loaded with cash and waiting for buying opportunity. Back to the US weight, 28% of the portfolio. So, if you are overweight, US stocks, you might consider Claremont's allocation. Now, what does he own? He owns an LNG company via SAP 21st Century Fox, Communications Entertainment, Colony Nordstar, REIT, Synchrony Financials, a very stable bank, Allergan Pharmaceuticals, Communication Company, Dell Communication Digital Company, Refinery and another Pharmaceutical, but this is a development Pharmaceutical company with no revenues. So, very diversified risk, this is the top 10 makes more than 45% of his portfolio. So, very diversified risk, but what strikes is the exposure to energy, but not energy as oil drilling, but more distribution, LNG distribution and refineries. Very interesting approach to the energy sector. Communications, he is also there, exposed there, REIT with a nice 7.61 yield, talking about Colony Nordstar, and a nice bank with a price earnings ratio of 11, Synchrony Financials. Cheneer Energy is a company that exports natural gas from the US all around the world and sells it also around the US. What's very specific about the company is that the book value is negative, minus 5 bucks per share, so much for the margin of safety, so the margin of safety is not obvious and if you run a screen looking for bargains companies, Cheneer Energy won't pop up because it has a negative book value, huge debt. Earnings per share are also negative, 1.03 dollars, trailing earnings, they have been higher around 2.5 in 2016 and above 4 dollars in 2015, so we have no book value and we have negative earnings. Another thing that will put away most value investors. However, Cheneer's revenue went from 200 million in 2015 to the current 2.5 billion, so it's really an investment company and in the last 5 years on average per year, Cheneer had an investment capital of 4.5 billion dollars per year, so it's really a company that's investing a lot into the future, so perhaps there is where Claremont sees value. Look at the investment thesis, so full service LNG offering around the world, currently using free train platforms, hoping to increase it to 7 train platforms, an estimated LNG demand growth is almost double by 2040. So the company has been really investing heavily in the future, building the LNG infrastructure and it hopes to gain benefits for the next 100 years. It's really a disruptor in the LNG field. So Cheneer has spent more than 20 billion dollars to create the largest LNG export facility in America, so it's really trying to disrupt the global LNG business. Here is where Claremont sees the value. So what's the lesson to learn here, the investment lesson from Seth Claremont? If the value is obvious to everybody, then it will be fairly priced. You have to see the value that the majority of other investors don't see. LNG closely related to oil, so everybody's wary about it. Seth Claremont is overweight, not oil, but natural gas. Very different situation there. We'll see how it works out. He thinks it will be a great deal and he has the patience to wait, add to his position and rebalance accordingly if the stock price goes up and down to manage his portfolio risk. If the stock price goes down, he buys more. When it returns, he sells it, books it in the profit and his risk remains equal. The second company that Claremont owns, 20th Century Fox, he has been steadily buying it in 2015-2016 and the stock price is still close to his cost price. The company has had pretty stable revenue of the last 10 years, but improving margins, forward price earnings ratio is at 11, nice dividend yield of 1.3% and the company has been buying back 3% of shares in the last year. So Fox, very stable, low valuations, cash cow, Claremont obviously thinks that somewhere in the future or somebody will buy it out, or the valuation it deserves will be much higher, or there will be some catalyst around. In the meantime, the company is growing, having a nice return and he can patiently wait for the catalyst to work on. Colony Northstar, a read that I already mentioned, 7.5% dividend yield, nice return on capital for Claremont in this environment. Synchrony Financial, another stable financial company, price earnings ratio of just 11, so also nice return, improved book value. Hipper probably hopes that the market will recognize the mispricing. Another very famous Claremont's investment is Alragon, its pharmaceutical company. He started buying the company at a price around $240, then bought more when the stock fell to $200 and then when the stock returned to $240 he sold a part of his portfolio. What's the value in Alragon, book value around $200 per share, so he thinks it can go much lower than this. So to conclude, Claremont's portfolio doesn't look sexy at all. A boring LNG distributor, a non-growing bank, pharmaceutical, nobody likes pharmaceuticals now, a refinery, an old, un-entertaining movie producing company, Dell computers, something of the past. Let's buy Apple. So you can see how he is really looking there where nobody wants to go and where the market is a little bit negative or turned against. This attached to his patience of buying, waiting buy more when the stock price drops has led him to returns above 20% per year over the last 30 years, making him one of the really greatest investors of all time. So to sum up, patience, go there where others don't dare, look for value that isn't obvious, be ready to buy more when the price drops more and rebalance properly. So you buy more when it drops but when it comes back you resell it. So you create immediately alpha an additional return and you keep your portfolio risk balanced. Just to note Claremont is really one of my favorite investors. He's so low-key but there is so much to learn about him. Thank you for watching. I'll see you in the next video. Please leave your comments below. Let's create a discussion. Are you a value investor? Do you like what Claremont is doing or do you think it's obsolete? Thank you and I'll see you in the next video.