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There are only a few things investors can do to counteract risk: diversify adequately, hedge when appropriate, and invest with a margin of safety. It is a precisely because we do not and cannot know all the risks of an investment that we strive to invest at a discount. The bargain element helps to provide a cushion for when things go wrong.

Seth Klarman

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Seth Klarman
Age: 67
Born: 1957
Born: May 21
New York City
New York
Seth Andrew Klarman
Wrong
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Cushion
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More quotes by Seth Klarman

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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.
Seth Klarman
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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?
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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There is no amount of bad news that the markets cannot see past.
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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Generally, the greater the stigma or revulsion, the better the bargain.
Seth Klarman
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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.
Seth Klarman
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Almost no one will accept responsibility for his or her role in precipitating a crisis: not leveraged speculators, not willfully blind leaders of financial institutions, and certainly not regulators, government officials, ratings agencies or politicians.
Seth Klarman
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Be indifferent if you lose your short term clients, remember they are your own worst enemy
Seth Klarman
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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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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.
Seth Klarman
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Value investing is predicated on the efficient market hypothesis being wrong.
Seth Klarman
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We are big fans of fear, and in investing it is clearly better to be scared than sorry.
Seth Klarman
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When a government official says a problem has been contained, pay no attention.
Seth Klarman
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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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I find value investing to be a stimulating, intellectually challenging, ever changing, and financially rewarding discipline
Seth Klarman
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Hold cash when opportunities are not presenting themselves.
Seth Klarman
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Never stop reading. History doesn't repeat, but it does rhyme.
Seth Klarman
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If you can remember that stocks aren't pieces of paper that gyrate all the time --they are fractional interests in businesses -- it all makes sense.
Seth Klarman
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Having clients with a long-term orientation is crucial. Nothing else is as important to the success of an investment firm.
Seth Klarman