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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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Seth Klarman
Age: 67
Born: 1957
Born: May 21
New York City
New York
Seth Andrew Klarman
Littles
Reverse
Find
Buying
Little
Near
Much
Selling
Absence
Works
Indicator
Worth
Indicators
Probably
Bargains

More quotes by Seth Klarman

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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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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.
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When managers are afraid of redemptions, they get liquid. We all saw how many managers went from leveraged long in 2007 to huge net cash in 2008, when the right thing to do in terms of value would have been to do the opposite.
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In reality, no one knows what the market will do trying to predict it is a waste of time, and investing based upon that prediction is a speculative undertaking.
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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.
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Value investing is predicated on the efficient market hypothesis being wrong.
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Value investing is risk aversion.
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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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Avoiding where others go wrong is an important step in achieving investment success. In fact, it almost assures it.
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As Graham, Dodd and Buffett have all said, you should always remember that you don't have to swing at every pitch. You can wait for opportunities that fit your criteria and if you don't find them, patiently wait. Deciding not to panic is still a decision.
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Investing today may well be harder than it has been at any time in our three decades of existence.
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We don't deal in absolutes. We deal in probabilities.
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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.
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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.
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Value investing by its very nature is contrarian.
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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.
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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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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.
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I think Buffett is a better investor than me because he has a better eye toward what makes a great business. And when I find a great business I'm happy to buy it and hold it. Most businesses don't look so great to me.
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Almost every financial blow up is because of leverage.
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