Legendary Investor Seth Klarman Praises Coinbase, Calls This Sector A 'Hunting Ground'

Baupost Group CEO Seth Klarman believes we are in the midst of a challenging investing environment, plagued by an "everything bubble," yet there are still some places to put money to work.

What To Know: The hedge fund manager, who rarely participates in interviews, recently appeared on CNBC's "Squawk Box" to promote a new revision of the book "Security Analysis," which he edited.

The book reminds investors of "the dangers of speculation and the importance of remembering what kind of environment you’re in," he said.

As for today's landscape, Klarman rates it a four out of 10 in terms of opportunity.

See Also: Hut 8's Crypto Empire Expands With A $50M Boost From Coinbase

"In a world that's changing as fast as this one, it's really important to think about not just what are the earnings today... but what are the longer-term prospects for the business," he added.

As a value investor, it seems out of character to invest in a company like Coinbase Global Inc COIN. But Klarman has exposure to the crypto company.

Coinbase is sitting on $5 billion in cash, has less than that in debt, and is doing some "smart things," he explained.

Growth names can be very valuable for investors as long as you only buy them when they are at attractive prices. That's what Warren Buffett does, Klarman said. 

What's Next: Klarman referred to the real estate market as his "hunting grounds." 

"We think real estate is an area that is full of so many fundamental challenges, but the fundamental challenges have caused urgent selling," Klarman said. "That doesn't automatically make it interesting, but it may mean that as other people abandon it, as other people face urgent pressure, there may be opportunities to buy."

Despite the lack of opportunities, investors can get an edge by being disciplined and focused. Although he rated the investing environment a four out of 10, it's better than it was in recent years, he said. 

"The nature of opportunity on a bottom-up basis is better than it was ... that means you should be wading in because you don't know how low it might get or how large the opportunity set might get and we've learned over 40 years that when you see something that's worth buying, something that provides an attractive return for the risk, you go ahead and buy some," Klarman said.

Read Next: Are Warren Buffett And Charlie Munger At Odds? Berkshire's BYD Sell-Off Leaves Investors Guessing