---
name: klarman-deep-value
description: "Use when evaluating Seth Klarman-style deep value and distressed opportunities: extreme margin of safety, forced sellers, liquidity discounts, complexity, downside protection, and patience."
invest: ./invest.md
---

# 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

1. Estimate conservative asset value and liquidation value.
2. Identify why the asset is mispriced: distress, complexity, illiquidity, neglect, forced selling.
3. Demand a large margin of safety.
4. Check balance sheet, legal structure, seniority, and liquidity.
5. 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.