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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.

Seth Klarman

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Seth Klarman
Age: 67
Born: 1957
Born: May 21
New York City
New York
Seth Andrew Klarman
Temper
Effort
Efforts
Successful
Despite
Wrong
Humility
Fact
Large
Facts
Taking
Dose
Care
Accepting
Investors
May
Arrogance
Must
Stand

More quotes by 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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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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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.
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Over the long run, the crowd is always wrong.
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Ratings agencies are highly conflicted, unimaginative dupes. They are blissfully unaware of adverse selection and moral hazard. Investors should never trust them.
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.
Seth Klarman
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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.
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.
Seth Klarman
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Value investing by its very nature is contrarian.
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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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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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.
Seth Klarman
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Hold cash when opportunities are not presenting themselves.
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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Patience and discipline can make you look foolishly out of touch until they make you look prudent and even prescient
Seth Klarman
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In a crisis, stocks of financial companies are great investments, because the tide is bound to turn. Massive losses on bad loans and soured investments are irrelevant to value improving trends and future prospects are what matter, regardless of whether profits will have to be used to cover loan losses and equity shortfalls for years to come.
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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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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Typically, we make money when we buy things. We count the profits later, but we know we have captured them when we buy the bargain.
Seth Klarman