“The avoidance of loss is the surest way to ensure a profitable outcome.” WayLossOutcomesProfitableAvoidance Author:Seth Klarman
“Perhaps if Hitler had had the wisdom to withdraw his troops and prepare for the defense of his own country, Germany, despite the loss of face this would entail in the losing of all Italy, then the course of the war, if not the outcome, would have been quite different.” IfsHas BeensDifferentWarCountryFacesCoursesLossLosingDefenseDespiteOutcomesGermanyTroops Author:Christopher Vokes
“The risk of an investment is described by both the probability and the potential amount of loss. The risk of an investment-the probability of an adverse outcome-is partly inherent in its very nature. A dollar spent on biotechnology research is a riskier investment than a dollar used to purchase utility equipment. The former has both a greater probability of loss and a greater percentage of the investment at stake.” UsedLossGreaterRiskAmountResearchDollarsInvestmentInvestingFormerOutcomesStakesInherentEquipmentProbabilityPercentagesUtilityAdverseBiotechnology Author:Seth Klarman
“In the financial markets, however, the connection between a marketable security and the underlying business is not as clear-cut. For investors in a marketable security the gain or loss associated with the various outcomes is not totally inherent in the underlying business; it also depends on the price paid, which is established by the marketplace. The view that risk is dependent on both the nature of investments and on their market price is very different from that described by beta.” DifferentLossViewsClearCuttingRiskSecurityDependsGainsConnectionsPaidInvestmentInvestingFinancialVariousOutcomesDependentInvestorsInherentMarketplaceFinancial MarketsBeta Author:Seth Klarman
“When people think of the outcomes of their decisions, they think much more short term than that. They think in terms of gains and losses.” PeopleThinkingTermLossDecisionGainsOutcomesShort TermGains And Losses Author:Daniel Kahneman
“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.” WayHardLyingStrongWishLossShareProveBehaviorGainsHotPhonesOutcomesReachingUrgesLunchInvestorsOfferingCompellingInitialsProfitableExaminationAvoidanceProve ItBrokersSpeculatorsFree Lunch Author:Seth Klarman