Seth Klarman Quotes - Page 2

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• 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

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• Never stop reading. History doesn't repeat, but it does rhyme.

  Seth Klarman

  Reading, Doe, Rhyme

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• Sometimes buying early on the way down looks like being wrong, but it isn't.

  Seth Klarman

  Looks, Investing, Way

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• The prevailing view has been that the market will earn a high rate of return if the holding period is long enough, but entry point is what really matters.

  Seth Klarman

  Views, Long, Matter

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• Value investors have to be patient and disciplined, but what I really think is you need not to be greedy. If you're greedy and you leverage, you blow up. Almost every financial blow up is because of leverage.

  Seth Klarman

  Blow, Thinking, Needs

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• 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

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• The cost of performing well in bad times can be relative underperformance in good times.

  Seth Klarman

  Cost, Investing, Good Times

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• If you can remember that stocks aren't pieces of paper that gyrate all the time --they are fractional interests in businesses -- it all makes sense.

  Seth Klarman

  Pieces, Paper, Remember

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• 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

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• As Graham, Dodd and Buffett have all said, you should always remember that you don't have to swing at every pitch. You can wait for opportunities that fit your criteria and if you don't find them, patiently wait. Deciding not to panic is still a decision.

  Seth Klarman

  Opportunity, Swings, Decision

  "Channeling Graham and Dodd: A Conversation with Seth Klarman". Value Investor Insight Interview, seekingalpha.com. October 29, 2008.

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• 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.

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• The avoidance of loss is the surest way to ensure a profitable outcome.

  Seth Klarman

  Loss, Outcomes, Way

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• The trick of successful investors is to sell when they want to, not when they have to.

  Seth Klarman

  Successful, Want, Tricks

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• We don't deal in absolutes. We deal in probabilities.

  Seth Klarman

  Deals, Probability, Absolutes

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• There are only a few things investors can do to counteract risk: diversify adequately, hedge when appropriate, and invest with a margin of safety. It is a precisely because we do not and cannot know all the risks of an investment that we strive to invest at a discount. The bargain element helps to provide a cushion for when things go wrong.

  Seth Klarman

  Safety, Risk, Investing

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• When people give away stocks based on forced selling or fear that is usually a great opportunity.

  Seth Klarman

  Opportunity, People, Giving

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• Speculators are obsessed with predicting: guessing the direction of stock prices. Every morning on cable television, every afternoon on the stock market report, every weekend in Barron's, every week in dozens of market newsletters, and whenever business people get together. In reality, no one knows what the market will do; trying to predict it is a waste of time, and investing based upon that prediction is a purely speculative undertaking.

  Seth Klarman

  Morning, Weekend, Reality

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• A simple rule applies: if you don't quickly comprehend what a company is doing, then management probably doesn't either.

  Seth Klarman

  Simple, Management, Company

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• In reality, no one knows what the market will do; trying to predict it is a waste of time, and investing based upon that prediction is a speculative undertaking.

  Seth Klarman

  Reality, Trying, Investing

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• It is always easiest to run with the herd; at times, it can take a deep reservoir of courage and conviction to stand apart from it. Yet distancing yourself from the crowd is an essential component of long-term investment success.

  Seth Klarman

  Running, Investment Success, Long

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• Risk is not inherent in an investment; it is always relative to the price paid. Uncertainty is not the same as risk. Indeed, when great uncertainty - such as in the fall of 2008 - drives securities prices to especially low levels, they often become less risky investments.

  Seth Klarman

  Fall, Risk, Levels

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• Why should the immediate opportunity set be the only one considered, when tomorrow's may well be considerably more fertile than today's?

  Seth Klarman

  Opportunity, May, Today

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• Warren Buffett is right when he says you should invest as if the market is going to be closed for the next five years. The fundamental principles of value investing, if they make sense to you, can allow you to survive and prosper when everyone else is rudderless. We have a proven map with which to navigate. It sounds kind of crazy, but in times of turmoil in the market. I’ve felt a sort of serenity in knowing that if I’ve checked and rechecked my work, one plus one still equals two regardless of where a stock trades right after I buy it.

  Seth Klarman

  Crazy, Years, Two

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• Selling, in particular, can be a challenge; many investors are tempted to become more optimistic when a security is performing well. This temptation must be resisted; tax considerations aside, when a security reaches full valuation, there is no longer a reason to own it.

  Seth Klarman

  Optimistic, Temptation, Challenges

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• As Buffett has often observed, value investing is not a concept that can be learned and gradually applied over time. It is either absorbed and adopted at once, or it is never truly learned.

  Seth Klarman

  Investing, Buffett, Adopted

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