Seth Klarman: Investors Should Focus On The Most Inefficient Pockets In The World

During his recent interview with CNBC, Seth Klarman recommended investors focus on the most inefficient pockets in the world. Here’s an excerpt from the interview:

Klarman: I think that markets can become more efficient, and there’s a question in my mind about once a market becomes more efficient, whether it actually does have the likelihood of becoming less efficient afterwards.

So for sure, there’s more money in public markets, things have become somewhat more efficient. But I also see a short-term orientation that tells me that it’s possible some pricing has actually become less efficient.

I think when you look at Meta, the stock’s been all over the place in a reasonably short period of time. Falling to under a hundred, then rising back up to almost three hundred. Literally months apart, for a large well-established company, that I think everybody can analyze.

So I think that there are opportunities.

Now, if a kid came to me and said, where do you think I should potentially make my career?

I would encourage them to look for the most inefficient pockets in the world.

I also think it’s important that they get mentored. That most people aren’t ready to just jump right into this business right out of school.

So, I do think there are opportunities. but people should ask themselves, what are my interests? What kind of edge might I have? If you’re from a different country, maybe you have great contacts in that country.

Maybe you know a lot about the business culture in that country. And so my advice would be to go where you’re naturally inclined and go where you think there may be interesting opportunities. Obviously a market that’s setting all-time highs may not be the best place to focus a career.

You can watch the entire discussion here: