Seth Klarman quotes

Seth Klarman is an American billionaire investor and the founder of the Baupost Group, a hedge fund based in Boston. With a net worth of over $1.5 billion, Klarman is known for his value investing philosophy and has been compared to legendary investors like Warren Buffett. He is also a philanthropist, supporting causes such as education and healthcare. Learn more about Seth Klarman and his investment strategies by following his articles and interviews online.

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

Targeting investment returns leads investors to focus on potential upside rather on downside risk. Rather than targeting a desired rate of return, even an eminently reasonable one, investors should target risk.

- Seth Klarman

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

Investors should always keep in mind that the most important metric is not the returns achieved but the returns weighed against the risks incurred.

- Seth Klarman

Investment success cannot be captured in a mathematical equation or a computer program.

- Seth Klarman

Investing today may well be harder than it has been at any time in our three decades of existence.

- Seth Klarman

Investing is the intersection of economics and psychology.

- Seth Klarman

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

In contrast to the speculators preoccupation with rapid gain, value investors demonstrate their risk aversion by striving to avoid loss.

- Seth Klarman

In a world in which most investors appear interested in figuring out how to make money every second and chase the idea du jour, there's also something validating about the message that it's okay to do nothing and wait for opportunities to present themselves or to pay off. That's lonely and contrary a lot of the time, but reminding yourself that that's what it takes is quite helpful.

- Seth Klarman

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

If you are predisposed to be patient, disciplined and psychologically appreciate the idea of buying bargains, then you're likely to be good at it. If you have a need for action, if you want to be involved in the new and exciting technological breakthroughs of our time, that's great, but you're not a value investor, and you shouldn't be one.

- Seth Klarman

I know of no long-time practitioner who regrets adhering to a value philosophy; few investors who embrace the fundamental principles ever abandon this investment approach for another.

- Seth Klarman

I find value investing to be a stimulating, intellectually challenging, ever changing, and financially rewarding discipline.

- Seth Klarman

Here's how to know if you have the makeup to be an investor. How would you handle the following situation? Let's say you own a Procter & Gamble in your portfolio and the stock price goes down by half. Do you like it better? If it falls in half, do you reinvest dividends? Do you take cash out of savings to buy more? If you have the confidence to do that, then you're an investor. If you don't, you're not an investor, you're a speculator, and you shouldn't be in the stock market in the first place.

- Seth Klarman

Having great clients is the key to investment success.

- Seth Klarman

Gold is unique because it has the age-old aspect of being viewed as a store of value. Nevertheless, it's still a commodity and has no tangible value, and so I would say that gold is a speculation. But because of my fear about the potential debasing of paper money and about paper money not being a store of value, I want some exposure to gold.

- Seth Klarman

Generally, the greater the stigma or revulsion, the better the bargain.

- Seth Klarman

Distancing yourself from the crowd is an essential component of long-term investment success.

- Seth Klarman

Deciding not to act is still a decision.

- Seth Klarman

By investing at a discount, Benjamin Graham knew that he was unlikely to experience losses.

- Seth Klarman

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

Beating the market has never been our objective. Rather, we have consistently tried not to lose money and, in doing so, have not only protected on the downside but also outperformed on the upside.

- Seth Klarman

Avoiding where others go wrong is an important step in achieving investment success.

- Seth Klarman

As Graham, Dodd and Buffett have all said, you should always remember that you don't have to swing at every pitch. You can wait for opportunities that fit your criteria and if you don't find them, patiently wait. Deciding not to act is still a decision.

- Seth Klarman

Analysts recommendations may not produce good results. In part this is due to the pressure placed on these analysts to recommend frequently rather than wisely.

- Seth Klarman

Almost every financial blow up is because of leverage.

- Seth Klarman

All an investor can do is follow a consistently disciplined and rigorous approach; over time the returns will come.

- Seth Klarman

A value strategy is of little use to the impatient investor since it usually takes time to pay off.

- Seth Klarman