Top 120 Seth Klarman Quotes (2024 Update)
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101. “Individual and institutional investors alike frequently demonstrate an inability to make long-term investment decisions based on business fundamentals.”

— Seth Klarman

102. “We continue to adhere to a common-sense view of risk – how much we can lose and the probability of losing it. While this perspective may seem over simplisticor even hopelessly outdated, we believe it provides a vital clarity about the true risks in investing.”

— Seth Klarman

103. “Be sure that you are well compensated for illiquidity – especially illiquidity without control – because it can create particularly high opportunity costs.”

— Seth Klarman

104. “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.”

— Seth Klarman

105. “Be indifferent if you lose your short term clients, remember they are your own worst enemy.”

— Seth Klarman

106. “There is an old saying, “How did you go bankrupt?” And the answer is, “Gradually, and then suddenly.” The impending fiscal crisis in the United States will make its appearance in the same way.”

— Seth Klarman

107. “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

108. “A tipping point is invisible, as we just saw in Greece. In most situations, everything appears fine until it’s not fine, until, for example, no one shows up at a Treasury auction.”

— Seth Klarman

109. “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

110. “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

111. “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.”

— Seth Klarman

112. “While knowing how to value businesses is essential for investment success, the first and perhaps most important step in the investment process is knowing where to look for opportunities.”

— Seth Klarman

113. “The government can indefinitely control both short-term and long-term interest rates.”

— Seth Klarman

114. “All investors must come to terms with the relentless continuity of the investment process.”

— Seth Klarman

115. “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.”

— Seth Klarman

116. “There is no amount of bad news that the markets cannot see past.”

— Seth Klarman

117. “The trick of successful investors is to sell when they want to, not when they have to.”

— Seth Klarman

118. “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

119. “Great investments don’t just knock on the door and say “buy me”.”

— Seth Klarman

120. “There are no long-term lessons – ever.”

— Seth Klarman

121. “Depressions aren’t good but the depression mentality is good.”

— Seth Klarman

122. “Markets need not be in sync with one another. Simultaneously, the bond market can be priced for sustained tough times, the equity market for a strong recovery, and gold for high inflation. Such an apparent disconnect is indefinitely sustainable.”

— Seth Klarman

123. “Right at the core, the mainstream has it backwards. Warren Buffett often quips that the first rule of investing is to not lose money, and the second rule is to not forget the first rule. Yet few investors approach the world with such a strict standard of risk avoidance.”

— Seth Klarman

124. “A commodity doesn’t have the same characteristics as a security, characteristics that allow for analysis. Other than a recent sale or appreciation due to inflation, analyzing the current or future worth of a commodity is nearly impossible.”

— Seth Klarman

125. “If you’ve just stared into the abyss, quickly forget it: the lessons of history can only hold you back.”

— Seth Klarman

126. “Excess capacity in people, machines, or property will be quickly absorbed.”

— Seth Klarman

127. “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

128. “Short sellers age in dog years.”

— Seth Klarman

129. “At the worst possible moment, when your fund is down because cheap things have gotten cheaper, you need to have capital, to have clients who will actually love the phone call and-most of the time, if not all the time-add, rather than subtract, capital.”

— Seth Klarman

130. “Don’t short many stocks. Instead they hedge for tail risk with CDS and options. They are happy to incur illiquidity.”

— Seth Klarman

131. “My experience is that short sellers do far better analysis than long buyers because they have to. The market is biased upward over time-as the saying goes, stocks are for the long run.”

— Seth Klarman

132. “Many LBOs are man-made disasters. When the price paid is excessive, the equity portion of an LBO is really an out-of-the-money call option. Many fiduciaries placed large amounts of the capital under their stewardship into such options in 2006 and 2007.”

— Seth Klarman

133. “At equal returns, public investments are generally superior to private investments not only because they are more liquid but also because amidst distress, public markets are more likely than private ones to offer attractive opportunities to average down.”

— Seth Klarman

134. “Like to have a catalyst – reduces dependence on the market: Distressed debt inherently has a catalyst – maturity.”

— Seth Klarman

135. “The government can reasonably rely on debt ratings when it forms programs to lend money to buyers of otherwise unattractive debt instruments.”

— Seth Klarman

136. “If another person were to enter the building, it would once again be empty.”

— Seth Klarman

137. “Avoid organizing investment team into silos.”

— Seth Klarman

138. “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