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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

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Having great clients is the key to investment success.
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Patience and discipline can make you look foolishly out of touch until they make you look prudent and even prescient
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Because investors are not usually penalized for adhering to conventional practices, doing so is the less professionally risky strategy, even though it virtually guarantees against superior performance.
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I find value investing to be a stimulating, intellectually challenging, ever changing, and financially rewarding discipline
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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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In a rising market, everyone makes money and a value philosophy is unnecessary. But because there is no certain way to predict what the market will do, one must follow a value philosophy at all times.
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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.
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If another person were to enter the building, it would once again be empty.
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When a government official says a problem has been contained, pay no attention.
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Successful investors must temper the arrogance of taking a stand with a large dose of humility, accepting that despite their efforts and care, they may in fact be wrong.
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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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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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I think Buffett is a better investor than me because he has a better eye toward what makes a great business. And when I find a great business I'm happy to buy it and hold it. Most businesses don't look so great to me.
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Almost every financial blow up is because of leverage.
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Be indifferent if you lose your short term clients, remember they are your own worst enemy
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Be focused on process and not outcome
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Over the long run, the crowd is always wrong.
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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.
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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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Do not suffer interim losses, relish and appreciate them
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