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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.

Seth Klarman

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Seth Klarman
Age: 67
Born: 1957
Born: May 21
New York City
New York
Seth Andrew Klarman
Long
Value
Redemption
Would
Huge
Cash
Went
Managers
Term
Opposite
Values
Opposites
Right
Terms
Many
Saws
Leveraged
Thing
Afraid
Liquid

More quotes by Seth Klarman

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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.
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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 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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At Baupost, we constantly ask: 'What should we work on today?' We keep calling and talking. We keep gathering information. You never have perfect information. So you work, work and work. Sometimes we thumb through ValuLine. How you fill your inbox is very important.
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Generally, the greater the stigma or revulsion, the better the bargain.
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If another person were to enter the building, it would once again be empty.
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Value investing is risk aversion.
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Excess capacity in people, machines, or property will be quickly absorbed.
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Limit risk with: Deep analysis Bargain purchase Sensitivity analysis.
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Ultimately, nothing should be more important to investors than the ability to sleep soundly at night.
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The single greatest edge an investor can have is a long-term orientation.
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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.
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The cost of performing well in bad times can be relative underperformance in good times.
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If you've just stared into the abyss, quickly forget it: the lessons of history can only hold you back.
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Macro worries are like sports talk radio. Everyone has a good opinion which probably means that none of them are good.
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While some might mistakenly consider value investing a mechanical tool for identifying bargains, it is actually a comprehensive investment philosophy that emphasizes the need to perform in-depth fundamental analysis, pursue long-term investment results, limit risk, and resist crowd psychology.
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Value investing by its very nature is contrarian.
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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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It's awful to have a depression, but it's a great thing to have a depression mentality because it means that we are not speculating, we are not living beyond our means, we don't quit our job to take a big risk because we know we might not get another job. There is something stable about a country, a society built on those values.
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Investors need to pick their poison: Either make more money when times are good and have a really ugly year every so often, or protect on the downside and don't be at the party so long when things are good.
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