Seth Klarman is one of the more secretive money managers out there so I don’t know what returns Baupost has generated in 2008.  Here are some recent stories with his thoughts on current market conditions. Looking at his SEC filing, I see a few interesting moves:

• Klarman didn’t open any bold new positions other than $61M in Barry Diller’s IACI and $52M in RHI Entertainment (RHIE).  There were smallish investments in Acergy (ACGY) and CapitalSource notes.
• True to their value investing philosophy, after massive drops in prices, Baupost added substantially to three energy partnerships, Breitburn Energy Partners (BBEP), Linn Energy (LINE) and Exterran Holdings (EXH).  LINE is fairly well-known (probably due to Jim Cramer) so it’s current price is close to quarter-end’s quote.  BBEP and EXH are off an additional 50%+ since then.  Klarman also added to already big positions in two media companies, News Corp (NWS) and Liberty Media (LMDIA).
• Klarman sold off CapitalSource (CSE) and a whole mess of SPACs.  What really caught my eye was the drastic reduction in the health insurance companies, UnitedHealth Group (UNH) and Wellpoint (WLP).  Klarman (and a few other big-name value investors) had opened these positions over the past 2 quarters and normally, value investors aren’t expected to exit positions so quickly.  Perhaps the folks at Baupost saw something bearish in the industry before the markets did.
• I think its important for readers to bear in mind that Klarman (and the next manager, Einhorn) have a wide range of markets they participate in.  So these SEC filings are incomplete pictures of what’s going on in their funds and it would be dangerous to blindly follow them or assume they are bullish on a stock or industry just because a position is shown in the filing.  For example, Einhorn is a prominent short-seller and shorts are not disclosed in the 13F filing.  So a long position could simply be the hedge portion of a bearish pair trade.  Or maybe Klarman is shorting the heck out of natural gas and has a few long positions like BBEP and LINE as a hedge.  I don’t think that’s the case but it’s something piggyback investors should consider.

After having issues with Third Avenue’s (Martin Whitman) filing, I decided to substitute David Einhorn of Greenlight Capital.