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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
Models
Markets
Physical
Sophisticated
Model
Trust
Despite
Risk
Mathematics
Predilection
Science
Using
Behavioral
Market
Analysts
Financial
Governed

More quotes by Seth Klarman

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Benjamin Graham wrote, Those with enterprise haven't the money, and those with money haven't the enterprise, to buy stocks when they are cheap.
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Be focused on process and not outcome
Seth Klarman
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Gold is unique because it has the age-old aspect of being viewed as a store of value. Nevertheless, it’s still a commodity and has no tangible value, and so I would say that gold is a speculation. But because of my fear about the potential debasing of paper money and about paper money not being a store of value, I want some exposure to gold.
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Depressions aren't good but the depression mentality is good.
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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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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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Limit risk with: Deep analysis Bargain purchase Sensitivity analysis.
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Investing is the intersection of economics and psychology.
Seth Klarman
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As Buffett has often observed, value investing is not a concept that can be learned and gradually applied over time. It is either absorbed and adopted at once, or it is never truly learned.
Seth Klarman
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The cost of performing well in bad times can be relative underperformance in good times.
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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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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Over the long run, the crowd is always wrong.
Seth Klarman
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Never stop reading. History doesn't repeat, but it does rhyme.
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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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
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Avoiding where others go wrong is an important step in achieving investment success. In fact, it almost assures it.
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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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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Hold cash when opportunities are not presenting themselves.
Seth Klarman