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

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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.
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I find value investing to be a stimulating, intellectually challenging, ever changing, and financially rewarding discipline
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Value investing is the discipline of buying shares at a significant discount from their current underlying values and holding them until more of their value is realised. The element of a bargain is the key to the process.
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The single greatest edge an investor can have is a long-term orientation.
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Value investing is risk aversion.
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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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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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Limit risk with: Deep analysis Bargain purchase Sensitivity analysis.
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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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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 While this perspective may seem over simplisticor even hopelessly outdated, we believe it provides a vital clarity about the true risks in investing.
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Avoiding where others go wrong is an important step in achieving investment success. In fact, it almost assures it.
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Value investing requires a great deal of hard work, unusually strict discipline, and a long-term investment horizon. Few are willing and able to devote sufficient time and effort to become value investors, and only a fraction of those have the proper mind-set to succeed.
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Never stop reading. History doesn't repeat, but it does rhyme.
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Be indifferent if you lose your short term clients, remember they are your own worst enemy
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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.
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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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Complexity - limits competition.
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Patience and discipline can make you look foolishly out of touch until they make you look prudent and even prescient
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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.
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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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