This article provides some perspective into Seth Klarman's investment philosophy. “At Baupost, we are big fans of fear."

Klarman has always stressed that the future is completely unpredictable. Investors must be prepared for any eventuality. The river may overflow its banks only once or twice in a century, but you still buy flood insurance.

John Byrne, at the time the chairman of Geico, hired Lou Simpson in 1979 to run Geico's investments as CIO. Byrne sent several candidates to Warren Buffett to be interviewed, but following a four hour interview, Buffett called on Byrne to stop the process, "That's the fellow."

The "fellow" has one of the great records in investing, like Buffett, looking for great businesses with a sustainable competitive advantage. He operates independently of Buffett with somewhat higher turnover but similar discipline.