Seth Klarman is one of the most successful investors and a hedge fund manager. He is known for following the investment philosophy of Benjamin Graham and the principles of value investing.
His hedge fund has generated compound returns-on-investment averaging 20 percent. He was ranked 15th among the highest earning hedge fund managers in the world in 2015. He is also known as the "Oracle of Boston". He has authored a book on value investing, Margin of Safety: Risk-averse Value Investing Strategies for the Thoughtful Investor.
His quotes are very useful for investors and traders who want to learn the principles of value investing. For new investors, his quotes will surely give an insight into his methods of investing.
1. 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.
2. 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.
3. 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.
4. The trick of successful investors is to sell when they want to, not when they have to.
5. A margin of safety is achieved when securities are purchased at prices sufficiently below underlying value to allow for human error, bad luck, or extreme volatility in a complex, unpredictable and rapidly changing world.
6. Investing is the intersection of economics and psychology.
7. 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 While this perspective may seem over simplisticor even hopelessly outdated, we believe it provides a vital clarity about the true risks in investing.
8. When a stock is selling at a discount to liquidation value per share, a near rock-bottom appraisal, it is frequently an attractive investment.
9. Most investors are primarily oriented toward return, how much they can make and pay little attention to risk, how much they can lose.
10. 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.