Value investing requires a great deal of hard work, unusually strict discipline, and a long-term investment horizon. Few are willing and able to devote sufficient time and effort to become value investors, and only a fraction of those have the proper mind-set to succeed.

Seth Klarman

Categorized in : Long Hard Work Discipline

The single greatest edge an investor can have is a long-term orientation.

Seth Klarman

investing term long

The stock market is the story of cycles and of the human behavior that is responsible for overreactions in both directions.

Seth Klarman

investing intelligent stories

Ultimately, nothing should be more important to investors than the ability to sleep soundly at night.

Seth Klarman

important sleep night

Value investing is at its core the marriage of a contrarian streak and a calculator.

Seth Klarman

calculators investing intelligent

The near absence of bargains works as a reverse indicator for us. When we find there is little worth buying, there is probably much worth selling.

Seth Klarman

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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

investing trying reality

Successful investors tend to be unemotional, allowing the greed and fear of others to play into their hands. By having confidence in their own analysis and judgement, they respond to market forces not with blind emotion but with calculated reason. Successful investors, for example, demonstrate caution in frothy markets and steadfast conviction in panicky ones. Indeed, the very way an investor views the market and it’s price fluctuations is a key factor in his or her ultimate investment success or failure.

Seth Klarman

keys successful views

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

Seth Klarman

return approach can-do

Over the long run, the crowd is always wrong.

Seth Klarman

crowds running long

Warren Buffett is right when he says you should invest as if the market is going to be closed for the next five years. The fundamental principles of value investing, if they make sense to you, can allow you to survive and prosper when everyone else is rudderless. We have a proven map with which to navigate. It sounds kind of crazy, but in times of turmoil in the market. I’ve felt a sort of serenity in knowing that if I’ve checked and rechecked my work, one plus one still equals two regardless of where a stock trades right after I buy it.

Seth Klarman

crazy two years

The avoidance of loss is the surest way to ensure a profitable outcome.

Seth Klarman

outcomes loss way

The inability to hold cash and the pressure to be fully invested at all times meant that when the plug was pulled out of the tub, all boats dropped as the water rushed down the drain.

Seth Klarman

tubs cash water

There's no such thing as a value company. Price is all that matters. At some price, an asset is a buy, at another it's a hold, and at another it's a sell.

Seth Klarman

company assets matter

The overwhelming majority of people are comfortable with consensus, but successful investors tend to have a contrarian bent.

Seth Klarman

majority successful people

Value investing is simple to understand but difficult to implement. Value investors are not supersophisticated analytical wizards who create and apply intricate computer models to find attractive opportunities or assess underlying value. The hard part is discipline, patience, and judgment. Investors need discipline to avoid the many unattractive pitches that are thrown, patience to wait for the right pitch, and judgment to know when it is time to swing.

Seth Klarman

swings simple opportunity

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

Seth Klarman

investing three may

Selling, in particular, can be a challenge; many investors are tempted to become more optimistic when a security is performing well. This temptation must be resisted; tax considerations aside, when a security reaches full valuation, there is no longer a reason to own it.

Seth Klarman

optimistic temptation challenges

I think markets will never be efficient because of human nature.

Seth Klarman

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It is always easiest to run with the herd; at times, it can take a deep reservoir of courage and conviction to stand apart from it. Yet distancing yourself from the crowd is an essential component of long-term investment success.

Seth Klarman

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Patience and discipline can make you look foolishly out of touch until they make you look prudent and even prescient

Seth Klarman

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