Comments on: why is this book worth so much?

Question: why is this book worth so much?

foxinthesnow — Mon, 30 Apr 2007 14:48:26 -0800

Can anyone tell me the significance of this book? My library has suddenly been inundated with ILL requests for it, but it would appear that our copy has been stolen. As you can see on the Amazon listing, it sells for over $1000, but why? What is this book? Why should it be so valuable? And why all of a sudden?

By: foxinthesnow

foxinthesnow — Mon, 30 Apr 2007 14:54:52 -0800

I should add that by Googling, I found plenty of articles confirming that it is a collectible book, and it is highly valuable, but I guess I am wondering what is it about this particular book? Aren't there plenty of books like this? And newer ones?

By: drezdn

drezdn — Mon, 30 Apr 2007 14:56:18 -0800

I can't site a source, but I believe it's mentioned in a popular book about investing as a great source for information.

By: smackfu

smackfu — Mon, 30 Apr 2007 14:57:53 -0800

BusinessWeek article on the subject.

"The 249-page book is especially hot among those seeking jobs with value-oriented investment firms. "You win serious points for talking Klarman," says a newly minted MBA who got his hands on a copy prior to a late-round interview with a top mutual fund firm. ""

By: Justinian

Justinian — Mon, 30 Apr 2007 15:00:40 -0800

The reason your library has been inundated with requests for it is because people intend to steal the book. Of course they have apparently been beaten to it.

ex-libris copies of collectible books aren't worth as much as trade copies, but they're still worth a bunch. I wrestled with my conscience over "losing" a local libraries hardcover copy of Neal Stephenson's "Snow Crash" but couldn't bring myself to do it. Someone else will have done so by now.

By: gillyflower

gillyflower — Mon, 30 Apr 2007 15:01:18 -0800

Here's a link to a Business Week article on the author and his book:

http://www.businessweek.com/magazine/content/06_32/b3996085.htm

The upshot of the article: a) you are not alone in noticing the popularity of the book (the author of the above article even went to OCLC to get stats on this book), b) Klarman is a Man of Mystery (TM) with one of the most successful investment firms ever to exist, so successful they can afford to turn away investors.

Extensive notes on the book can be found at Motley Fool's website (http://www.fool.com/community/pod/2006/060504.htm?ref=foolwatch), which might help satisfy library patrons who are frustrated by not being able to get their hands on a copy.

Hope this helps...love from a fellow librarian!

By: gillyflower

gillyflower — Mon, 30 Apr 2007 15:08:16 -0800

Justinian, anyone can buy "Snow Crash" for $5 used on Amazon, meaning that if you "lose" your local library's copy, at least you have only cheated them out of $5 + $30 processing costs or so. Anyone who steals Margin of Safety from a library has to be aware that they are cheating a WHOLE lot of library patrons (locally and elsewhere) out of the chance to read the book, and/or incurring huge costs for the library to replace the item, depending on what the library decides to do. In terms of $$, it's a hugely selfish act.

I would say to someone stealing this book from the library: it's your tax dollars, bub. Next time a tax increase comes up to benefit the library, you better support it--you benefited (monetarily) FAR more from the library than most people will in a lifetime. And if the library doesn't have enough copies of the new book from your favorite author, tough s**t--you've only got yourself to blame on that one.

By: foxinthesnow

foxinthesnow — Mon, 30 Apr 2007 15:11:26 -0800

Yes, I saw these articles, too, from my Google-searching, but they are from 2006. I wonder why, like, literally this week, this book is so hot. Oh, well.

By: the dief

the dief — Mon, 30 Apr 2007 15:32:03 -0800

My local university library has this listed as library use only, which means it's in open stacks but not allowed to be checked out. Tomorrow maybe I'll go look to see if it's actually on the shelves.

By: The corpse in the library

The corpse in the library — Mon, 30 Apr 2007 15:38:17 -0800

As you can see on the Amazon listing, it sells for over $1000

I can see that people ask that much for it, which isn't the same thing.

By: gillyflower

gillyflower — Mon, 30 Apr 2007 15:42:45 -0800

Ah, I see: you want to know "why now". Hmmm...I tried Google News and found only this brief mention in an article on the blog GuruFocus, from 4/9/2007: http://www.gurufocus.com/news.php?id=5281

I don't have any way of knowing if GuruFocus is wildly popular enough to cause an ILL spike all on its own. But the fact that GF chose that week to discuss the book may mean that it is gathering some kind of buzz in other ways, not documentable on the Internet, or at least not through search engines/news aggregators.

Someone more astute in the ways of investment research than I am might want to check and see if Baupost Group (Klarman's firm) is having some kind of huge growth spurt recently, or is doing something avant-garde or controversial. Though if it is, I couldn't find it in Google News, either.

The question of how desire for this book is spread...wouldn't it make an interesting article? If you like it, take it...I'm not hardcore into ILL anymore, that was last year's job. ;)

By: thinkingwoman

thinkingwoman — Mon, 30 Apr 2007 16:34:45 -0800

heh, i really thought this was a fake post written by the author to generate buzz for his book.

By: mendel

mendel — Mon, 30 Apr 2007 16:46:19 -0800

I can see that people ask that much for it, which isn't the same thing.

The three completed eBay auctions still readable all went for over $1000 (two at $1300).

I'd sum up the reason for its popularity as "Hedge funds are the Big Thing right now". Fresh grads want to get in at them and make their billion, personal investors want their slice of the action, and Klarman is the Warren Buffett of hedge funds.

By: junkbox

junkbox — Mon, 30 Apr 2007 17:38:29 -0800

There was a hedge-fund guru interview in Barron's this week; I can see from their website that it's called "A Legend Lashes Out." I just skimmed the headlines (today's hedge funds suck and mutual funds suck even more), but it may have been a profile of Klarman -- thus, the increased interest.

By: aramaic

aramaic — Mon, 30 Apr 2007 17:39:51 -0800

In terms of $$, it's a hugely selfish act.

They're stealing it specifically to be selfish. It's not just the monetary value of the book -- by stealing it, they are intentionally depriving other people of the information. Thereby making themselves (having access to the information) slightly more valuable.

This is the same mechanic behind frazzled students hiding specific books, so that other library patrons can't locate it, but they still can. Back when I worked the stacks, I'd routinely notice people "mis-filing" books, surreptitiously sliding them into dark corners, even prying off a vent cover and putting books in the ductwork, right around essay/exam time.

These were not rare texts, just something that was relevant to a particular class, and which the library had only one copy of. By hiding it, rather than borrowing it, they ensure their own access -- but that access is a secret, and is invulnerable to recall notices.

By: ThePinkSuperhero

ThePinkSuperhero — Mon, 30 Apr 2007 19:20:49 -0800

There was a hedge-fund guru interview in Barron's this week...it may have been a profile of Klarman

Nope; Michael Steinhardt.

By: iamkimiam

iamkimiam — Mon, 30 Apr 2007 20:03:38 -0800

The "why now" could be that the book was recommended as reading material for some class or seminar in the local area. Everybody finding it ridiculously priced online will next try the library.

By: theiconoclast31

theiconoclast31 — Mon, 30 Apr 2007 20:49:14 -0800

From the Amazon reviews (bolded for emphasis):

Great book so far,

Any aspiring value investor who would think about buying a book fo 1200 dollars should buy a book on market timing and technical analysis instead. I think there is one called "believing in greater fool theory and acting accordingly."

Value investors will put in an ILL request at the local library.

-William E. Clarkson Jr. "ellis"

By: Kwantsar

Kwantsar — Mon, 30 Apr 2007 20:57:10 -0800

Seth Klarman is my distant acquaintance, and I have read the book.

First, you should understand just how good he is at managing money. The Baupost Group isn't doing anything super-secret-- no heavy math or Stevie-Cohen-style information trading. Rather, Klarman and his staff (many of whom have left him over the years to run Billions) practice good old-fashioned value investing, heavy on the balance sheet, heavy on reproduction costs and assets-in-use. The book doesn't contain anything qualitatively different than you may find in books by Graham and Dodd (or Bruce Greenwald or Joel Greenblatt, for that matter). But this is the precise reason for the appeal to so many investors. They believe that they can make money just like Seth Klarman can, without knowing option math, and without determining whether its better to use a Gaussian Copula or a T-distribution in their large pool model.

Second, I do not believe that this book is one of those that students steal or hide because it helps them with their schoolwork. It may improve someone's stock pitches and help them with their job search, but the Seth Klarman restaurant is now so full that no one eats there anymore. Dropping his name in an interview is passe.

Third, it indeed sells for over $1000. I know plenty of people who have paid that much. Usually they make copies and re-sell the book, hooping to pick up 110% of what they paid. If you had access to an email list of 1,000 to 2,000 business school students and alumni, you too could find a buyer.

Fourth, after Klarman graduated (from Harvard), his former professors seeded his fund in short order. Everyone knew (thought?) he was that smart, and that's how legends are formed in the consciousness of the investing community.

Last, Klarman owns the rights to the book now. He's not much of a publicity whore, and has stated that republishing the book would create just as much hubbub as not republishing it. He recently said that he'd get around to republishing it "someday," and claimed that he didn't much care that readers were violating copyright by photocopying the book. When you can make billions running money, you usually don't care about a business book that will never, ever sell as well as the Jim Collins rubbish, and Who Moved My Cheese.

By: Kwantsar

Kwantsar — Tue, 01 May 2007 00:06:55 -0800

Dropping his name in an interview is passe.

I should retract that (it reads too strongly), and say that almost everyone who has seriously studied value investing knows who Seth Klarman is, and mentioning his book is not a source of bonus points, contra the BusinessWeek article.

I should also clarify my first point and say that as far as I know*, the Baupost approach is not based upon advanced financial mathematics, but more upon business sense-- and this is the reason that some people find the book (and his value methodology) so irresistible.

*If Klarman (or any other famous investor) drastically changed his approach in such a fashion, it probably would be in his interest to keep this information from absolutely everyone.

Sorry for posting twice, foxinthesnow. I wrote my first answer too hastily.

By: joeclark

joeclark — Tue, 01 May 2007 05:46:58 -0800

It would have helped to have had the book title in clear text in the question.

By: Pastabagel

Pastabagel — Tue, 01 May 2007 10:39:23 -0800

If he doesn't care about the copyright, is the book online anywhere?

By: geoff.

geoff. — Tue, 17 Jul 2007 00:47:53 -0800

The pricing is crazy, if anyone wants an electronic copy I can "guide" you to it.

I agree with everything Kwantsar says. I went to try and hunt down this book, but libraries I tried all had stolen complaints. Hopefully if we can spread this around the pricing will get reasonable and we won't see people stealing from fucking libraries.

Kwantsar has a great review, an incredibly boring book. Good, but a re-discovery of Bachelier's thesis it ain't. Give me a barely intelligible books on the applications of the synthesis between quantum and classical game theory.

I'm actually surprised it is such a big hit. Whenever I think of hedge funds I think of SAC or Renaissance, then I realize 85% of hedge funds aren't the scientific laboratories as they think of themselves as.