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Because investors are not usually penalized for adhering to conventional practices, doing so is the less professionally risky strategy, even though it virtually guarantees against superior performance.

Seth Klarman

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Seth Klarman
Age: 67
Born: 1957
Born: May 21
New York City
New York
Seth Andrew Klarman
Though
Guarantees
Adhering
Less
Superior
Penalized
Even
Superiors
Professionally
Performance
Risky
Strategy
Virtually
Performances
Practices
Usually
Investors
Practice
Conventional

More quotes by 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.
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Individual and institutional investors alike frequently demonstrate an inability to make long-term investment decisions based on business fundamentals.
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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 While this perspective may seem over simplisticor even hopelessly outdated, we believe it provides a vital clarity about the true risks in investing.
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Value investing is predicated on the efficient market hypothesis being wrong.
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When all feels calm and prices surge, the markets may feel safe but, in fact, they are dangerous because few investors are focusing on risk.
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At equal returns, public investments are generally superior to private investments not only because they are more liquid but also because amidst distress, public markets are more likely than private ones to offer attractive opportunities to average down.
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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.
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Value investing by its very nature is contrarian.
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Do not trust financial market risk models. Despite the predilection of some analysts to model the financial markets using sophisticated mathematics, the markets are governed by behavioral science, not physical science.
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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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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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Do not suffer interim losses, relish and appreciate them
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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.
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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.
Seth Klarman
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When a Wall Street analyst or broker expresses optimism, investors must take it with a grain of salt.
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Risk is not inherent in an investment it is always relative to the price paid. Uncertainty is not the same as risk. Indeed, when great uncertainty - such as in the fall of 2008 - drives securities prices to especially low levels, they often become less risky investments.
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We don't deal in absolutes. We deal in probabilities.
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Limit risk with: Deep analysis Bargain purchase Sensitivity analysis.
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Over the long run, the crowd is always wrong.
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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.
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