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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.

Seth Klarman

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Seth Klarman
Age: 67
Born: 1957
Born: May 21
New York City
New York
Seth Andrew Klarman
Science
Mathematics
Predilection
Using
Behavioral
Market
Analysts
Financial
Governed
Models
Markets
Physical
Sophisticated
Trust
Model
Risk
Despite

More quotes by Seth Klarman

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Avoiding where others go wrong is an important step in achieving investment success. In fact, it almost assures it.
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In contrast to the speculators preoccupation with rapid gain, value investors demonstrate their risk aversion by striving to avoid loss.
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Do not suffer interim losses, relish and appreciate them
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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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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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Value investing is predicated on the efficient market hypothesis being wrong.
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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 While this perspective may seem over simplisticor even hopelessly outdated, we believe it provides a vital clarity about the true risks in investing.
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When a Wall Street analyst or broker expresses optimism, investors must take it with a grain of salt.
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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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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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We don't deal in absolutes. We deal in probabilities.
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Having great clients is the key to investment success.
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Value investing by its very nature is contrarian.
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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.
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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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 you buy bargains and they become better bargains, it is easy to start to question yourself, which can impair your judgement. Real or imagined concerns about client redemptions, employee defections can greatly influence behavior away from rational.
Seth Klarman
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To a value investor, investments come in three varieties: undervalued at one price, fairly valued at another price, and overvalued at still some higher price. The goal is to buy the first, avoid the second, and sell the third.
Seth Klarman
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Once you adopt a value-investment strategy, any other investment behavior starts to seem like gambling.
Seth Klarman
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Investing today may well be harder than it has been at any time in our three decades of existence.
Seth Klarman