Quotessence
Home / Authors / Seth Klarman
Seth Klarman

Seth Klarman Quotes

Author

Filter quotes by topic

AllInvestorsInvestingValuesInvestmentRiskTermLongIfsShouldFinancialLong TermMayKnowsOpportunityReturnWellsLossNeedsWayBargains

Famous Seth Klarman Quotes

“Rather, risk is a perception in each investor's mind that results from analysis of the probability and amount of potential loss from an investment. If an exploratory oil well proves to be a dry hole, it is called risky. If a bond defaults or a stock plunges in price, they are called risky. But if the well is a gusher, the bond matures on schedule, and the stock rallies strongly, can we say they weren't risky when the investment after it is concluded than was known when it was made.”

IfsMindWellsMadeLossResultsKnownRiskAmountProvePerceptionInvestmentInvestingOilHolesAnalysisDryInvestorsSchedulesProbabilityPlungeDefault
Author:Seth Klarman
Create image

“Wall Street can be a dangerous place for investors. You have no choice but to do business there, but you must always be on your guard. The standard behavior of Wall Streeters is to pursue maximization of self-interest; the orientation is usually short term. This must be acknowledged, accepted, and dealt with. If you transact business with Wall Street with these caveats in mind, you can prosper. If you depend on Wall Street to help you, investment success may remain elusive.”

IfsMindMaySelfHelpingChoicesTermInterestStreetsDangerousWallDependsBehaviorStandardsInvestmentAcceptedPursueInvestorsShort TermSelf InterestElusiveOrientationDangerous PlacesInvestment Success
Author:Seth Klarman
Create image

“Beware leverage in all its forms. Borrowers - individual, corporate, or government - should always match fund their liabilities against the duration of their assets. Borrowers must always remember that capital markets can be extremely fickle, and that it is never safe to assume a maturing loan can be rolled over. Even if you are unleveraged, the leverage employed by others can drive dramatic price and valuation swings; sudden unavailability of leverage in the economy may trigger an economic downturn.”

IfsShouldMayGovernmentRememberFormIndividualEconomyEconomicSafeAssumingCorporateDramaticFundMatureAssetsSwingsEmployedLoanTriggersDurationFickleLiabilityValuationDownturnBorrowersEconomic Downturn
Author:Seth Klarman
Create image

“The government - the ultimate short-term-oriented player - cannot withstand much pain in the economy or the financial markets. Bailouts and rescues are likely to occur, though not with sufficient predictability for investors to comfortably take advantage. The government will take enormous risks in such interventions, especially if the expenses can be conveniently deferred to the future. Some of the price-tag is in the form of back- stops and guarantees, whose cost is almost impossible to determine.”

IfsGovernmentPainFormTermEconomyPlayerImpossibleRiskCostAdvantageUltimateFinancialDetermineEnormousSufficientGuaranteesExpensesInvestorsRescueInterventionShort TermTagFinancial MarketsPredictabilityPrice TagBailouts
Author:Seth Klarman
Create image

“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.”

IfsWantFeelsHumansMayFactsValuesFoundHuman BeingsViewsHalfEconomyOne ThingTomorrowRight NowStrategyInvestmentBottomVery GoodCashDozenVery StrongClientsBargainsMacro
Author:Seth Klarman
Create image

“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.”

IfsKnowsFirstsFallHalfSituationFollowingHandleSavingMakeupInvestorsCashSavingsGambleYou Like ItDividendsPortfoliosSpeculatorsStock Price
Author:Seth Klarman
Create image

“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.”

IfsLooksValuesOpportunityDecisionRelationInvestmentDetermineCreatorManageGuidanceInvestors
Author:Seth Klarman
Create image

“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.”

IfsShouldYearsKindStillsTwoValuesNextFeltSoundPrinciplesKnowingFiveCrazyFundamentalsTradeInvestingMake SenseFive YearsMapsPlusSerenityProvenTurmoilNavigateFundamental PrinciplesBuffettWarren Buffet
Author:Seth Klarman
Create image

“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.”

IfsWantNeedsIdeasActionValuesInvolvedAppreciateExcitingPatientBe GoodOur TimeBuyingInvestorsTechnologicalBreakthroughBe PatientBargains
Author:Seth Klarman
Create image