Seth Klarman Quotes About Values

Quotes about: Values

• Value investing is at its core the marriage of a contrarian streak and a calculator.

  Seth Klarman

  Intelligent, Investing, Calculators

• Value investing is risk aversion.

  Seth Klarman

  Risk, Insightful, Investing

• Value investing is predicated on the efficient market hypothesis being wrong.

  Seth Klarman

  Investing, Hypothesis, Efficient

• A margin of safety is achieved when securities are purchased at prices sufficiently below underlying value to allow for human error, bad luck, or extreme volatility in a complex, unpredictable and rapidly changing world.

  Seth Klarman

  Errors, Safety, Luck

  "Here's an explanation of Ben Graham's concept of 'margin of safety'". www.businessinsider.com. February 10, 2016.

• Warren Buffett once wrote that value investing is like an inoculation--it either takes or it doesn't--and when you explain to somebody what it is and how it works and why it works and show them the returns, either they get it or they don't.

  Seth Klarman

  Investing, Return, Warren Buffet

• As value investors, our business is to buy bargains that financial market theory says do not exist. We've delivered great returns to our clients for a quarter century-a dollar invested at inception in our largest fund is now worth over 94 dollars, a 20% net compound return. We have achieved this not by incurring high risk as financial theory would suggest, but by deliberately avoiding or hedging the risks that we identified.

  Seth Klarman

  Risk, Return, Clients

• It is important to remember that value investing is not a perfect science. It is an, with an ongoing need for judgment, refinement, patience, and reflection. It requires endless curiosity, the relentless pursuit of additional information, the raising of questions, and the search for answers. It necessitates dealing with imperfect information - knowing you will never know everything and that that must not prevent you from acting. It requires a precarious balance between conviction, steadfastness in the face of adversity, and doubt - keeping in mind the possibility that you could be wrong.

  Seth Klarman

  Adversity, Reflection, Knowing

• One thing I want to emphasize is that, like any human being, we can discuss our view of the economy and the market. Fortunately for our clients, we don't tend to operate based on the view. Our investment strategy is to invest bottom up, one stock at a time, based on price compared to value. And while we may have a macro view that things aren't very good right now - which in fact we feel very strongly we will put money to work regardless of that macro view if we find bargains. So tomorrow, if we found half a dozen bargains, we would invest all our cash.

  Seth Klarman

  Views, Facts, Clients

• I know of no long-time practitioner who regrets adhering to a value philosophy; few investors who embrace the fundamental principles ever abandon this investment approach for another

  Seth Klarman

  Regret, Philosophy, Long

• It turns out that value investing is something that is in your blood. There are people who just don't have the patience and discipline to do it, and there are people who do. So it leads me to think it's genetic.

  Seth Klarman

  Thinking, Blood, Discipline

• Value investing requires a great deal of hard work, unusually strict discipline, and a long-term investment horizon. Few are willing and able to devote sufficient time and effort to become value investors, and only a fraction of those have the proper mind-set to succeed.

  Seth Klarman

  Hard Work, Discipline, Long

• If an asset has cash flow or the likelihood of cash flow in the near term and is not purely dependment on what a future buyer might pay, then it's an investment. If an asset's value is totally dependent on the amount a future buyer might pay, then its purchase is speculation.

  Seth Klarman

  Cash Flow, Might, Pay

• The latest trade of a security creates a dangerous illusion that its market price approximates its true value. This mirage is especially dangerous during periods of market exuberance. The concept of "private market value" as an anchor to the proper valuation of a business can also be greatly skewed during ebullient times and should always be considered with a healthy degree of skepticism.

  Seth Klarman

  Anchors, Healthy, Degrees

• Value investing is simple to understand but difficult to implement. Value investors are not supersophisticated analytical wizards who create and apply intricate computer models to find attractive opportunities or assess underlying value. The hard part is discipline, patience, and judgment. Investors need discipline to avoid the many unattractive pitches that are thrown, patience to wait for the right pitch, and judgment to know when it is time to swing.

  Seth Klarman

  Opportunity, Simple, Swings

• If you are predisposed to be patient, disciplined and psychologically appreciate the idea of buying bargains, then you're likely to be good at it. If you have a need for action, if you want to be involved in the new and exciting technological breakthroughs of our time, that's great, but you're not a value investor, and you shouldn't be one.

  Seth Klarman

  Ideas, Appreciate, Needs

• In contrast to the speculators preoccupation with rapid gain, value investors demonstrate their risk aversion by striving to avoid loss.

  Seth Klarman

  Loss, Risk, Aversion

• To a value investor, investments come in three varieties: undervalued at one price, fairly valued at another price, and overvalued at still some higher price. The goal is to buy the first, avoid the second, and sell the third.

  Seth Klarman

  Goal, Three, Firsts

• In a crisis, stocks of financial companies are great investments, because the tide is bound to turn. Massive losses on bad loans and soured investments are irrelevant to value; improving trends and future prospects are what matter, regardless of whether profits will have to be used to cover loan losses and equity shortfalls for years to come.

  Seth Klarman

  Loss, What Matters, Years

• Value in relation to price, not price alone, must determine your investment decisions. If you look to Mr Market as a creator of investment opportunities (where price departs from underlying value), you have the makings of a value investor. If you insist on looking to Mr Market for investment guidance however, you are probably best advised to hire someone else to manage your money.

  Seth Klarman

  Opportunity, Decision, Looks

• Once you adopt a value-investment strategy, any other investment behavior starts to seem like gambling.

  Seth Klarman

  Gambling, Strategy, Investment

• In a rising market, everyone makes money and a value philosophy is unnecessary. But because there is no certain way to predict what the market will do, one must follow a value philosophy at all times.

  Seth Klarman

  Philosophy, Rising, Way

• Value investors will not invest in businesses that they cannot readily understand or ones they find excessively risky. Hence few value investors will own the shares of technology companies. Many also shun commercial banks, which they consider to have unanalyzable assets, as well as property and casualty insurance companies, which have both unanalyzable assets and liabilities.

  Seth Klarman

  Technology, Commercial Banks, Share

• One must understand the importance of an endless drive to get information and seek value.

  Seth Klarman

  Information, Endless, Importance

• I find value investing to be a stimulating, intellectually challenging, ever changing, and financially rewarding discipline

  Seth Klarman

  Discipline, Challenges, Investing

• While knowing how to value businesses is essential for investment success, the first and perhaps most important step in the investment process is knowing where to look for opportunities

  Seth Klarman

  Opportunity, Investment Success, Knowing

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