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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.

Seth Klarman

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Seth Klarman
Age: 67
Born: 1957
Born: May 21
New York City
New York
Seth Andrew Klarman
Matter
Turn
Bounds
Tides
Investments
Great
Company
Companies
Irrelevant
Stocks
Years
Turns
Investment
Improving
Prospects
Values
Profit
Trends
Losses
Whether
Financial
Regardless
Tide
Future
Crisis
Cover
Profits
Used
Loss
Bound
Equity
Soured
Come
Value
Massive
Loan
Loans

More quotes by Seth Klarman

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Investment success cannot be captured in a mathematical equation or a computer program.
Seth Klarman
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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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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.
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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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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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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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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Having great clients is the key to investment success.
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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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Patience and discipline can make you look foolishly out of touch until they make you look prudent and even prescient
Seth Klarman
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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.
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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Generally, the greater the stigma or revulsion, the better the bargain.
Seth Klarman
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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.
Seth Klarman
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Excess capacity in people, machines, or property will be quickly absorbed.
Seth Klarman
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Individual and institutional investors alike frequently demonstrate an inability to make long-term investment decisions based on business fundamentals.
Seth Klarman
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Almost every financial blow up is because of leverage.
Seth Klarman
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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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Ultimately, nothing should be more important to investors than the ability to sleep soundly at night.
Seth Klarman
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In reality, no one knows what the market will do trying to predict it is a waste of time, and investing based upon that prediction is a speculative undertaking.
Seth Klarman