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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
Agency
Ratings
Highly
Adverse
Trust
Unaware
Moral
Hazards
Blissfully
Never
Agencies
Unimaginative
Rating
Conflicted
Selection
Dupes
Investors
Hazard

More quotes by 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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Over the long run, the crowd is always wrong.
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In contrast to the speculators preoccupation with rapid gain, value investors demonstrate their risk aversion by striving to avoid loss.
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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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Depressions aren't good but the depression mentality is good.
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Ultimately, nothing should be more important to investors than the ability to sleep soundly at night.
Seth Klarman
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Value investing is predicated on the efficient market hypothesis being wrong.
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Value investing requires a great deal of hard work, unusually strict discipline, and a long-term investment horizon. Few are willing and able to devote sufficient time and effort to become value investors, and only a fraction of those have the proper mind-set to succeed.
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
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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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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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It is crucial in a sound investment process to search a mile wide than a mile deep with they find something - also.. never stop digging for information.
Seth Klarman
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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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I find value investing to be a stimulating, intellectually challenging, ever changing, and financially rewarding discipline
Seth Klarman
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My view is that an investor is better off knowing a lot about a few investments than knowing a little about each of a great many holdings. One's very best idea's are likely to generate higher returns for a given level of risk than one's hundredth or thousandth best idea.
Seth Klarman
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As Buffett has often observed, value investing is not a concept that can be learned and gradually applied over time. It is either absorbed and adopted at once, or it is never truly learned.
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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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.
Seth Klarman
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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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Limit risk with: Deep analysis Bargain purchase Sensitivity analysis.
Seth Klarman