Seth Klarman Quotes - Page 4

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Investment success cannot be captured in a mathematical equation or a computer program.

Seth Klarman

Investment Success, Mathematical Equations, Computer

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A value strategy is of little use to the impatient investor since it usually takes time to pay off.

Seth Klarman

Use, Littles, Pay

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My view is that an investor is better off knowing a lot about a few investments than knowing a little about each of a great many holdings. One's very best idea's are likely to generate higher returns for a given level of risk than one's hundredth or thousandth best idea.

Seth Klarman

Views, Ideas, Knowing

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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

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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

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Successful investors like stocks better when they’re going down. When you go to a department store or a supermarket, you like to buy merchandise on sale, but it doesn’t work that way in the stock market. In the stock market, people panic when stocks are going down, so they like them less when they should like them more. When prices go down, you shouldn’t panic, but it’s hard to control your emotions when you’re overextended, when you see your net worth drop in half and you worry that you won’t have enough money to pay for your kids’ college.

Seth Klarman

Kids, Successful, College

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Frequent comparative ranking can only reinforce a short-term investment perspective. It is understandably difficult to maintain a long-term view when, faced with the penalties for poor short-term performance, the long-term view may well be from the unemployment line ... Relative-performance-oriented investors really act as speculators. Rather than making sensible judgments about the attractiveness of specific stocks and bonds, they try to guess what others are going to do and then do it first.

Seth Klarman

Views, Perspective, Long

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To value investors the concept of indexing is at best silly and at worst quite hazardous. Warren Buffett has observed that "in any sort of a contest - financial, mental or physical - it's an enormous advantage to have opponents who have been taught that it's useless to even try." I believe that over time value investors will outperform the market and that choosing to match it is both lazy and shortsighted.

Seth Klarman

Believe, Silly, Lazy

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Investing today may well be harder than it has been at any time in our three decades of existence.

Seth Klarman

Three, Investing, May

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When a Wall Street analyst or broker expresses optimism, investors must take it with a grain of salt.

Seth Klarman

Wall, Optimism, Grain Of Salt

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Investors should pay attention not only to whether but also to why current holdings are undervalued. It is critical to know why you have made an investment and to sell when the reason for owning it no longer applies. Look for investments with catalysts that may assist directly in the realization of underlying value. Give reference to companies having good managements with a personal financial stake in the business. Finally, diversify your holdings and hedge when it is financially attractive to do so.

Seth Klarman

Giving, Good Man, Attention

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When a stock is selling at a discount to liquidation value per share, a near rock-bottom appraisal, it is frequently an attractive investment.

Seth Klarman

Rocks, Investment, Selling

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Benjamin Graham wrote, "Those with enterprise haven't the money, and those with money haven't the enterprise, to buy stocks when they are cheap."

Seth Klarman

Enterprise, Havens

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Value investing is risk aversion.

Seth Klarman

Risk, Insightful, Investing

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While no one wishes to incur losses, you couldn't prove it from an examination of the behavior of most investors and speculators. The speculative urge that lies within most of us is strong; the prospect of a free lunch can be compelling, especially when others have already seemingly partaken. It can be hard to concentrate on potential losses while others are greedily reaching for gains and your broker is on the phone offering shares in the latest "hot" initial public offering. Yet the avoidance of loss is the surest way to ensure a profitable outcome.

Seth Klarman

Strong, Lying, Loss

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Successful investors must temper the arrogance of taking a stand with a large dose of humility, accepting that despite their efforts and care, they may in fact be wrong.

Seth Klarman

Humility, Successful, Effort

"When I Met the Legends of Investing - Part 4". Interview with Vishal Khandelwal, www.safalniveshak.com. June 8, 2015.

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Avoiding where others go wrong is an important step in achieving investment success. In fact, it almost assures it.

Seth Klarman

Investment Success, Important, Facts

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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

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We buy expecting to hold a bond to maturity and a stock forever.

Seth Klarman

Maturity, Forever, Expecting

"Jason Zweig Interviews Seth Klarman At CFA Institute Annual Conference". Interview with Jason Zweig, www.gurufocus.com. July 15, 2010.

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Here’s how to know if you have the makeup to be an investor. How would you handle the following situation? Let’s say you own a Procter & Gamble in your portfolio and the stock price goes down by half. Do you like it better? If it falls in half, do you reinvest dividends? Do you take cash out of savings to buy more? If you have the confidence to do that, then you’re an investor. If you don’t, you’re not an investor, you’re a speculator, and you shouldn’t be in the stock market in the first place.

Seth Klarman

Fall, Makeup, Saving

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I think Buffett is a better investor than me because he has a better eye toward what makes a great business. And when I find a great business I'm happy to buy it and hold it. Most businesses don't look so great to me.

Seth Klarman

Eye, Thinking, Looks

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Do not trust financial market risk models. Despite the predilection of some analysts to model the financial markets using sophisticated mathematics, the markets are governed by behavioral science, not physical science.

Seth Klarman

Risk, Financial, Sophisticated

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Value investing is the discipline of buying shares at a significant discount from their current underlying values and holding them until more of their value is realised. The element of a bargain is the key to the process.

Seth Klarman

Keys, Discipline, Investing

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Flexible approach - will look at ALL asset classes.

Seth Klarman

Class, Looks, Assets

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Complexity - limits competition.

Seth Klarman

Competition, Limits, Complexity

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Born: May 21, 1957
Occupation: Author
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