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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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If you can remember that stocks aren't pieces of paper that gyrate all the time --they are fractional interests in businesses -- it all makes sense.
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I know of no long-time practitioner who regrets adhering to a value philosophy few investors who embrace the fundamental principles ever abandon this investment approach for another
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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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The inability to hold cash and the pressure to be fully invested at all times meant that when the plug was pulled out of the tub, all boats dropped as the water rushed down the drain.
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Complexity - limits competition.
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Almost every financial blow up is because of leverage.
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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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Depressions aren't good but the depression mentality is good.
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Like to have a catalyst - reduces dependence on the market: Distressed debt inherently has a catalyst - maturity.
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There is no amount of bad news that the markets cannot see past.
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When a government official says a problem has been contained, pay no attention.
Seth Klarman
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We don't deal in absolutes. We deal in probabilities.
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Value investing by its very nature is contrarian.
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Analysts recommendations may not produce good results. In part this is due to the pressure placed on these analysts to recommend frequently rather than wisely.
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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.
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Do not trust financial market risk models. Despite the predilection of some analysts to model the financial markets using sophisticated mathematics, the markets are governed by behavioral science, not physical science.
Seth Klarman
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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.
Seth Klarman
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Do not suffer interim losses, relish and appreciate them
Seth Klarman
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Be indifferent if you lose your short term clients, remember they are your own worst enemy
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