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To achieve long-term success over many financial market and economic cycles, observing a few rules is not enough. Too many things change too quickly in the investment world for that approach to succeed. It is necessary instead to understand the rationale behind the rules in order to appreciate why they work when they do and don't when they don't.

Seth Klarman

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Seth Klarman
Age: 67
Born: 1957
Born: May 21
New York City
New York
Seth Andrew Klarman
World
Understand
Approach
Investment
Order
Behinds
Quickly
Change
Behind
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Enough
Instead
Financial
Rationale
Many
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Rules
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Economic
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Long
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Investing

More quotes by Seth Klarman

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I find value investing to be a stimulating, intellectually challenging, ever changing, and financially rewarding discipline
Seth Klarman
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While it might seem that anyone can be a value investor, the essential characteristics of this type of investor-patience, discipline, and risk aversion-may well be genetically determined.
Seth Klarman
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Like to have a catalyst - reduces dependence on the market: Distressed debt inherently has a catalyst - maturity.
Seth Klarman
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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.
Seth Klarman
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Ultimately, nothing should be more important to investors than the ability to sleep soundly at night.
Seth Klarman
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In a crisis, stocks of financial companies are great investments, because the tide is bound to turn. Massive losses on bad loans and soured investments are irrelevant to value improving trends and future prospects are what matter, regardless of whether profits will have to be used to cover loan losses and equity shortfalls for years to come.
Seth Klarman
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While some might mistakenly consider value investing a mechanical tool for identifying bargains, it is actually a comprehensive investment philosophy that emphasizes the need to perform in-depth fundamental analysis, pursue long-term investment results, limit risk, and resist crowd psychology.
Seth Klarman
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Excess capacity in people, machines, or property will be quickly absorbed.
Seth Klarman
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The government can indefinitely control both short-term and long-term interest rates.
Seth Klarman
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When managers are afraid of redemptions, they get liquid. We all saw how many managers went from leveraged long in 2007 to huge net cash in 2008, when the right thing to do in terms of value would have been to do the opposite.
Seth Klarman
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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
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In a rising market, everyone makes money and a value philosophy is unnecessary. But because there is no certain way to predict what the market will do, one must follow a value philosophy at all times.
Seth Klarman
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If another person were to enter the building, it would once again be empty.
Seth Klarman
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One of the biggest challenges in investing is that the opportunity set available today is not the complete opportunity set that should be considered. Limiting your opportunity set to the one immediately at hand would be like limiting your spouse to the students you met in high school
Seth Klarman
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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.
Seth Klarman
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In reality, no one knows what the market will do trying to predict it is a waste of time, and investing based upon that prediction is a speculative undertaking.
Seth Klarman
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Do not suffer interim losses, relish and appreciate them
Seth Klarman
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We continue to adhere to a common-sense view of risk - how much we can lose and the probability of losing it. While this perspective may seem over simplisticor even hopelessly outdated, we believe it provides a vital clarity about the true risks in investing.
Seth Klarman
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If only one word is to be used to describe what Baupost does, that word should be: 'Mispricing'. We look for mispricing due to over-reaction.
Seth Klarman
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Interestingly, we have beaten the market quite handsomely over this time frame, although beating the market has never been our objective. Rather, we have consistently tried not to lose money and, in doing so, have not only protected on the downside but also outperformed on the upside.
Seth Klarman