Klarman[10]
“We don’t have an analytical advantage, we just look in the right place.” – Seth Klarman
“Seek facts diligently, advice never.” – Philip Carret
“Doubt is not a pleasant condition, but certainty is absurd.” – Voltaire
“Investing is the intersection of economics and psychology. The analysis is actually the easy part. The economics, the valuation of the business isn’t that hard. The psychology – how much do you buy, do you buy it at this price, do you wait for a lower price, what do you do when it looks like the world might end – those things are harder. Knowing whether you stand there, buy more, or whether something has legitimately gone wrong and you need to sell, those are harder things. That you learn with experience, by having the right psychological makeup.” – Seth Klarman[11]
“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.” – Seth Klarman[12]
“Value investors have to be patient and disciplined, but what I really think is you need not to be greedy. If you’re greedy and you leverage, you blow up. Almost every financial blow up is because of leverage.” – Seth Klarman[13]
“Investing is an activity of forecasting the yield over the life of an asset while speculation is the activity of forecasting the psychology of the market.” – John Maynard Keynes
“The future is uncertain; it is always a difficult time to invest.” – John Griffin
“Stocks aren’t cheap and popular at the same time.” – Unknown
“There are two hedges I know of; one is cash and the other is knowledge.” – Bruce Berkowitz
“Superior investors make more money in good times than they give back in bad times.” – Howard Marks
“The desire to perform all the time is usually a barrier to performing over time.” – Robert Olstein
“When you locate a bargain, you must ask, ‘Why me, God? Why am I the only one who could find this bargain?'” – Charlie Munger
“The market always does what it’s supposed to do only never when it’s supposed to do it.” -ArnoldVan De Berg
“I now use a two-track analysis. First, what are the factors that really govern the interest involved, rationally considered? And second, what are the subconscious influences where the brain at a subconscious level is automatically doing these things – which by and large are useful, but which often misfunction.”[14] – Charlie Munger [Ed. note: first, consider rational expectations and probabilities; then carefully weigh the psychological factors and assess the irrational component.]
“When you build a bridge, you insist that it can carry 30,000 pounds, but you only drive 10,000-pound trucks across it. And that same principle works in investing.” – Warren Buffett
“Investment is an activity of forecasting the yield on assets over the life of the asset;…speculation is the activity of forecasting the psychology of the market.”[15] – JM Keynes
“All of humanity’s problems stem from man’s inability to sit quietly in a room alone.” – Blaise Pascal
“If we have a strength, it is in recognizing when we are operating well within our circle of competence and when we are approaching the perimeter.” – Warren Buffett
“The trick of successful investors is to sell when they want to, not when they have to.” – Seth Klarman, Margin of Safety
“We are big fans of fear, and in investing it is clearly better to be scared than sorry.” – Seth Klarman
“Beware of little expenses; a small leak will sink a great ship.” – Benjamin Franklin
“The overwhelming majority of people are comfortable with consensus, but successful investors tend to have a contrarian bent.” – Seth Klarman
“The key to investing is not assessing how much an industry is going to affect society, or how much it will grow, but rather determining the competitive advantage of any given company and, above all, the durability of that advantage.” – Warren Buffett[16]
“Those who spend too much will eventually be owned by those who are thrifty.” – John Templeton
“Risk means more things can happen than will happen.” – Peter Bernstein
“Being a value investor means you look at the downside before looking at the upside.” – Li Lu
“We worry top-down, but we invest bottom-up.” – Seth Klarman
“I know a lot of people have very strong and definite plans that they’ve worked out on all kinds of things, but we’re subject to a tremendous number of outside influences and the vast majority of them cannot be predicted. So my idea is to stay flexible. My only plan is to keep coming to work every day. I like to steer the boat each day rather than plan ahead way into the future.” – Henry Singleton
“More money has been lost reaching for yield than at the point of a gun.” – Raymond DeVoe
“Both individual skill (art) and chance are important factors in determining success or failure.” – Graham and Dodd
“There is no such thing as a bad risk. There are only bad rates.” – Jack Ringwalt, Founder and CEO of National Indemnity
“Fish deeper, fish alone.” – Paul Sonkin
“The stock market is filled with individuals who know the price of everything, but the value of nothing.” – Phil Fisher
“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
“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
“For forty years I’ve seen the manic-depressive cycle of investor psychology swing crazily: between fear and greed – we all know the refrain – but also between optimism and pessimism, and between credulity and skepticism. In general, following the beliefs of the herd – and swinging with the pendulum – will give you average performance in the long run and can get you killed at the extremes.” – Howard Marks
“Great investors are not unemotional, but are inversely emotional – they get worried when the market is up and feel good when everyone is worried.” – Bill Miller
“If we decide we are wrong about something, we exit. Period.” -David Einhorn
“Always remembering that we might be wrong, we must contemplate alternatives, concoct hedges, and search vigilantly for validation of our assessments. We always sell when a security’s price begins to reflect full value, because we are never sure that our thesis will be precisely correct.”- Seth Klarman
“Having a large amount of leverage is like driving a car with a dagger on the steering wheel pointed at your heart. If you do that, you will be a better driver. There will be fewer accidents but when they happen, they will be fatal.” – Warren Buffett
“To achieve long-term success over many financial market and economic cycles, observing a few rules is not enough. Too many things change too quickly in the investment world for that approach to succeed. It is necessary instead to understand the rationale behind the rules in order to appreciate why they work when they do and don’t when they don’t.” – Seth Klarman
“Buying’s easier, selling’s hard – [it’s] hard to know when to get out.” – Seth Klarman[17]
“I think markets will never be efficient because of human nature.” – Seth Klarman
Look at the numbers and think for yourself. – Unknown
“‘Experience’ is what you got when you didn’t get what you wanted.” – Howard Marks
“Many shall be restored that now are fallen and many shall fall that are now in honor.” – Horace
“For years, when someone asked me what my biggest fear was as an investor in managing my portfolio, my answer was that it was buying too soon on the way down from
