Seth Klarman isn’t very bullish about the stock market. Klarman just disclosed that he reduced his BBEP holdings by $40 Million. He is concerned about runaway inflation and currency collapse. Here is what he said in his latest investor letter:
“…Disaster hedging – always an important tool for investors – takes on heightened significance in today’s unprecedentedly challenging environment. Yet, as this insight is not unique to us, the cost of insurance is high. There are no easy ways to navigate these turbulent waters. But because the greatest risks are of currency debasement and runaway inflation, protection against a currency collapse – such as exposure to gold – and against much higher interest rates seem like necessary hedges to maintain.”
We guess drugs might provide some protection against inflation as well. Baupost doubled its bet on Aveo Pharma (AVEO) at the end of April. Today Baupost disclosed that it now owns 4.2 Million shares of AVEO. At the end of December Klarman had only 2 Million shares.
Samuel Isaly’s OrbiMed Advisors had nearly 1 Million shares of AVEO at the end of December. Brookside Capital had nearly 900 thousand shares and Anand Parekh’s Alyeska Investment Group had nearly 600 K AVEO shares in their portfolios. Aveo increased 4.9% today.