Even value investors have their guilty pleasures
Advertising mogul Ed Eskandarian is selling his minority stake in the Boston Red Sox to Seth Klarman, a well known Boston hedge fund manager, according to two people briefed on the transaction.
via Boston Red Sox – Minority owner selling stake in Red Sox – The Boston Globe.
Seth Klarman, the man who wrote the most famous (or infamous) value investing book of the last ten years, Margin of Saftey (read my review), seems to have made a distinctly non-value purchase. While the details of the transaction haven’t been released, we do know that public consensus on the Red Sox’ value is probably in the $1 billion range or at least 40% above the price paid for the franchise in 2002 by John Henry and Co.
The Red Sox seem to be reaching a crescendo in their illustrious history with regular rookie of the year contenders, an MVP, two world series in the last 5 years, and a farm system seemingly bursting at the seams. How could Mr. Risk-Averse Klarman see value in this?!
Just goes to show you, for some things, no risk outweighs the reward.
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