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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
Right
Terms
Many
Saws
Leveraged
Thing
Afraid
Liquid
Long
Value
Redemption
Would
Huge
Cash
Went
Managers
Term
Opposite
Values
Opposites

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Excess capacity in people, machines, or property will be quickly absorbed.
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Generally, the greater the stigma or revulsion, the better the bargain.
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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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Ultimately, nothing should be more important to investors than the ability to sleep soundly at night.
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A value strategy is of little use to the impatient investor since it usually takes time to pay off.
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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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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.
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Value investing is the discipline of buying shares at a significant discount from their current underlying values and holding them until more of their value is realised. The element of a bargain is the key to the process.
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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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Hold cash when opportunities are not presenting themselves.
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Once you adopt a value-investment strategy, any other investment behavior starts to seem like gambling.
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Why should the immediate opportunity set be the only one considered, when tomorrow's may well be considerably more fertile than today's?
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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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When people give away stocks based on forced selling or fear that is usually a great opportunity.
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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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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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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 all feels calm and prices surge, the markets may feel safe but, in fact, they are dangerous because few investors are focusing on risk.
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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.
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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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