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Investors should always keep in mind that the most important metric is not the returns achieved but the returns weighed against the risks incurred. Ultimately, nothing should be more important to investors than the ability to sleep soundly at night.

Seth Klarman

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Seth Klarman
Age: 67
Born: 1957
Born: May 21
New York City
New York
Seth Andrew Klarman
Important
Ultimately
Metric
Mind
Return
Metrics
Always
Risk
Weighed
Sleep
Returns
Ability
Investors
Keep
Risks
Night
Achieved
Incurred
Nothing
Investing
Soundly

More quotes by Seth Klarman

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The near absence of bargains works as a reverse indicator for us. When we find there is little worth buying, there is probably much worth selling.
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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.
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A value strategy is of little use to the impatient investor since it usually takes time to pay off.
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Almost every financial blow up is because of leverage.
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At Baupost, we constantly ask: 'What should we work on today?' We keep calling and talking. We keep gathering information. You never have perfect information. So you work, work and work. Sometimes we thumb through ValuLine. How you fill your inbox is very important.
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A tipping point is invisible, as we just saw in Greece. In most situations, everything appears fine until it's not fine, until, for example, no one shows up at a Treasury auction.
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Complexity - limits competition.
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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.
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Analysts recommendations may not produce good results. In part this is due to the pressure placed on these analysts to recommend frequently rather than wisely.
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Generally, the greater the stigma or revulsion, the better the bargain.
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Investing is the intersection of economics and psychology.
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Investors need to pick their poison: Either make more money when times are good and have a really ugly year every so often, or protect on the downside and don't be at the party so long when things are good.
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A commodity doesn't have the same characteristics as a security, characteristics that allow for analysis. Other than a recent sale or appreciation due to inflation, analyzing the current or future worth of a commodity is nearly impossible.
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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.
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The stock market is the story of cycles and of the human behavior that is responsible for overreactions in both directions.
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Investment success cannot be captured in a mathematical equation or a computer program.
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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?
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Be focused on process and not outcome
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Investing today may well be harder than it has been at any time in our three decades of existence.
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There is no amount of bad news that the markets cannot see past.
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