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Famous Seth Klarman Quotes

“Investors frequently benefit from making decisions with less than perfect knowledge and are well rewarded for bearing the risk of uncertainty. The time other investors spend delving into the last unanswered detail may cost them the chance to buy into situations at prices so low they offer a margin of safety despite the incomplete information”

WellsMayLastsChanceDecisionPerfectSituationRiskInformationCostOffersBenefitsLowsSafetyDetailsDespiteUncertaintyInvestorsMarginsIncompleteMaking DecisionsUnansweredDelvingIncomplete Information
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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.”

KnowsGivingShouldLooksMayMadeReasonValuesPayAttentionCompanyManagementSellsInvestmentFinancialCurrentsCriticalRealizationPay AttentionAttractiveGood ManInvestorsStakesCatalystUndervaluedOwning It
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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.”

TryingFirstsWellsMayLongDifficultTermLinesPoorViewsPerspectiveJudgmentPerformancesInvestmentLong TermInvestorsRelativeSensiblePenaltiesUnemploymentShort TermAttractivenessRankingSpeculators
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“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
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“When excesses such as lax lending standards become widespread and persist for some time, people are lulled into a false sense of security, creating an even more dangerous situation. In some cases, excesses migrate beyond regional or national borders, raising the ante for investors and governments. These excesses will eventually end, triggering a crisis at least in proportion to the degree of the excesses. Correlations between asset classes may be surprisingly high when leverage rapidly unwinds.”

PeopleMayEndsGovernmentSituationClassCasesSecurityDangerousDegreesCreatingStandardsCrisisBordersProportionAssetsInvestorsExcessPersistLendingCorrelationUnwindMigrateLaxDangerous SituationsNational BordersFalse Sense Of Security
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“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
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“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
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