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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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Seth Klarman
Age: 67
Born: 1957
Born: May 21
New York City
New York
Seth Andrew Klarman
Never
Agencies
Unimaginative
Rating
Conflicted
Selection
Dupes
Investors
Hazard
Agency
Ratings
Highly
Adverse
Trust
Unaware
Moral
Hazards
Blissfully

More quotes by Seth Klarman

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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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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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Avoiding where others go wrong is an important step in achieving investment success. In fact, it almost assures it.
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When a stock is selling at a discount to liquidation value per share, a near rock-bottom appraisal, it is frequently an attractive investment.
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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.
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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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The single greatest edge an investor can have is a long-term orientation.
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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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Depressions aren't good but the depression mentality is good.
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Investment success cannot be captured in a mathematical equation or a computer program.
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If only one word is to be used to describe what Baupost does, that word should be: 'Mispricing'. We look for mispricing due to over-reaction.
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Investors should always keep in mind that the most important metric is not the returns achieved but the returns weighed against the risks incurred. Ultimately, nothing should be more important to investors than the ability to sleep soundly at night.
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Once you adopt a value-investment strategy, any other investment behavior starts to seem like gambling.
Seth Klarman
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The government can indefinitely control both short-term and long-term interest rates.
Seth Klarman
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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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It sounds kind of crazy, but in times of turmoil in the market, I've felt a sort of serenity in knowing that I've checked and re-checked my work, one plus one still equals two regardless of where a stock trades right after I buy it.
Seth Klarman
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Be focused on process and not outcome
Seth Klarman
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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.
Seth Klarman
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One of the biggest challenges in investing is that the opportunity set available today is not the complete opportunity set that should be considered. Limiting your opportunity set to the one immediately at hand would be like limiting your spouse to the students you met in high school
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There are no long-term lessons - ever.
Seth Klarman