Seth Klarman: Stocks Will Have Zero Return For A Decade

Legendary fund manager Seth Klarman of the Baupost Group made some rare public comments recently at the CFA Institute in Boston. Suffice it to say that he does not have a bright and sunny view of the world.

Some choice quotes relayed by Aaron Pressman at Reuters:

* "Given the recent run-up [in stocks], I'd be worried that we'll have another 10 years of zero returns."

* "I'm more worried about the world broadly than I've ever been in my whole career."

* Current market conditions remind Klarman of a Hostess Twinkie snack cake because "everything is being manipulated by the government" and appears "artificial."

* Publicly traded real estate investment

trusts...have "rallied enormously" and are "quite unattractive."

* Inflation is a risk that Klarman said he is particularly concerned with given the government's high rate of borrowing to bail out the financial system. Baupost has purchased far out-of-the-money puts on bonds to hedge the risk, he said.

Baupost has 30% of its assets in cash.