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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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Seth Klarman
Age: 67
Born: 1957
Born: May 21
New York City
New York
Seth Andrew Klarman
Employee
Client
Away
Bargains
Become
Rational
Greatly
Better
Concern
Clients
Real
Behavior
Concerns
Influence
Redemption
Question
Imagined
Start
Judgement
Impair
Easy

More quotes by Seth Klarman

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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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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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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.
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It turns out that value investing is something that is in your blood. There are people who just don't have the patience and discipline to do it, and there are people who do. So it leads me to think it's genetic.
Seth Klarman
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Ultimately, nothing should be more important to investors than the ability to sleep soundly at night.
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Hold cash when opportunities are not presenting themselves.
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The overwhelming majority of people are comfortable with consensus, but successful investors tend to have a contrarian bent.
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Over the long run, the crowd is always wrong.
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There is no amount of bad news that the markets cannot see past.
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If you've just stared into the abyss, quickly forget it: the lessons of history can only hold you back.
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Risk is not inherent in an investment it is always relative to the price paid. Uncertainty is not the same as risk. Indeed, when great uncertainty - such as in the fall of 2008 - drives securities prices to especially low levels, they often become less risky investments.
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Things that have never happened before are bound to occur with some regularity. You must always be prepared for the unexpected, including sudden, sharp downward swings in markets and the economy. Whatever adverse scenario you can contemplate, reality can be far worse.
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It's awful to have a depression, but it's a great thing to have a depression mentality because it means that we are not speculating, we are not living beyond our means, we don't quit our job to take a big risk because we know we might not get another job. There is something stable about a country, a society built on those values.
Seth Klarman
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There are no long-term lessons - ever.
Seth Klarman
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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.
Seth Klarman
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We don't deal in absolutes. We deal in probabilities.
Seth Klarman
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While it might seem that anyone can be a value investor, the essential characteristics of this type of investor-patience, discipline, and risk aversion-may well be genetically determined.
Seth Klarman
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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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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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Why should the immediate opportunity set be the only one considered, when tomorrow's may well be considerably more fertile than today's?
Seth Klarman