Klarman Deep Value
Use this skill to apply Seth Klarman-style deep value: buy assets at large discounts to conservative value when complexity, illiquidity, distress, or forced selling creates a margin of safety.
When To Use
- Deep value and distressed analysis
- Liquidation value, asset value, or hidden value review
- Forced-seller and illiquidity discount opportunities
- Downside-first portfolio review
Trigger phrases include Klarman, Baupost, margin of safety, deep value, distressed, liquidation value, and forced seller.
Process
- Estimate conservative asset value and liquidation value.
- Identify why the asset is mispriced: distress, complexity, illiquidity, neglect, forced selling.
- Demand a large margin of safety.
- Check balance sheet, legal structure, seniority, and liquidity.
- Define catalyst and patience horizon.
Output Format
md
# Klarman View: [Asset]
## Verdict
Buy / Watchlist / Too Little Safety / Value Trap / Pass
## Conservative Value
## Margin Of Safety
## Mispricing Source
## Downside Protection
## Catalyst / Patience
## Invalidation
Guardrails
- Do not confuse cheap with safe.
- Do not ignore liquidity and legal seniority.
- Do not rely on optimistic appraisals.
Questflow Use
In Questflow, this skill is best used as a downside-first distressed and deep-value underwriting module.