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Pressure to produce over the short term - a gun to the head of everyone - encourages excessive risk taking which manifests itself in several ways - fully invested posture at all times, the use of leverage, and a market centric orientation that makes it difficult to stand apart from the crowd and take a long term perspective.

Seth Klarman

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Seth Klarman
Age: 67
Born: 1957
Born: May 21
New York City
New York
Seth Andrew Klarman
Take
Ways
Market
Invested
Long
Head
Pressure
Orientation
Way
Term
Perspective
Crowd
Centric
Times
Short
Crowds
Manifests
Everyone
Produce
Several
Leverage
Use
Taking
Gun
Encourages
Difficult
Risk
Apart
Excessive
Makes
Stand
Fully
Posture

More quotes by Seth Klarman

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Do not suffer interim losses, relish and appreciate 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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While some might mistakenly consider value investing a mechanical tool for identifying bargains, it is actually a comprehensive investment philosophy that emphasizes the need to perform in-depth fundamental analysis, pursue long-term investment results, limit risk, and resist crowd psychology.
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Never stop reading. History doesn't repeat, but it does rhyme.
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The overwhelming majority of people are comfortable with consensus, but successful investors tend to have a contrarian bent.
Seth Klarman
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Value investing is risk aversion.
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The cost of performing well in bad times can be relative underperformance in good times.
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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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Ultimately, nothing should be more important to investors than the ability to sleep soundly at night.
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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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Be focused on process and not outcome
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A value strategy is of little use to the impatient investor since it usually takes time to pay off.
Seth Klarman
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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.
Seth Klarman
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Limit risk with: Deep analysis Bargain purchase Sensitivity analysis.
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.
Seth Klarman
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Investing is the intersection of economics and psychology.
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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There are no long-term lessons - ever.
Seth Klarman
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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.
Seth Klarman
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We don't deal in absolutes. We deal in probabilities.
Seth Klarman