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Seth Klarman Biography

Seth Andrew Klarman (born May 21, 1957) is an American investor and hedge fund manager. He is known as a value investor and is currently the chief executive and portfolio manager of the Baupost Group, a Boston-based private investment partnership he founded in 1982.

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Seth Klarman Quotes

Unlike return, however, risk is no more quantifiable at the end of an investment that it was at its beginning. Risk simply cannot be described by a single number. Intuitively we understand that risk varies from investment to investment: a government bond is not as risky as the stock of a high-technology company. But investments do not provide information about their risks the way food packages provide nutritional data.

Government, Numbers, Packages, Provide, Simply, Technology

Benjamin Graham wrote, "Those with enterprise haven't the money, and those with money haven't the enterprise, to buy stocks when they are cheap. "

Buy, Enterprise, Graham, Havens, Wrote

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.

Discipline, Hard Work, Horizon, Investing, Long

The government can always rescue the markets or interfere with contract law whenever it deems convenient with little or no apparent cost. (Investors believe this now and, worse still, the government believes it as well. We are probably doomed to a lasting legacy of government tampering with financial markets and the economy, which is likely to create the mother of all moral hazards. The government is blissfully unaware of the wisdom of Friedrich Hayek: "The curious task of economics is to demonstrate to men how little they really know about what they imagine they can design. ")

Believe, Create, Economy, Men, Moral, Mother

Risk is not inherent in an investment; it is always relative to the price paid. Uncertainty is not the same as risk. Indeed, when great uncertainty - such as in the fall of 2008 - drives securities prices to especially low levels, they often become less risky investments.

Become, Drives, Fall, Levels, Risk

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

Government, Long, Interest, Rates, Indefinitely

When a government official says a problem has been "contained," pay no attention.

Attention, Contained, Government, Pay

Speculators are obsessed with predicting: guessing the direction of stock prices. Every morning on cable television, every afternoon on the stock market report, every weekend in Barron's, every week in dozens of market newsletters, and whenever business people get together. 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 purely speculative undertaking.

Morning, Newsletters, Prices, Reality, Report, Weekend

The average person can’t really trust anybody. They can’t trust a broker, because the broker is interested in churning commissions. They can’t trust a mutual fund, because the mutual fund is interested in gathering a lot of assets and keeping them. And now it’s even worse because even the most sophisticated people have no idea what’s going on.

Average, Churning, Ideas, Mutual, People

The way to maximize outcome is to focus on the process.

Focus, Outcomes, Way, Outcome, Maximize

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.

Unique, Age, Gold, Debasing, Aspect, Speculation

Typically, we make money when we buy things. We count the profits later, but we know we have captured them when we buy the bargain.

Bargain, Captured, Make, Making Money, Profit, Typically

In investing it is never wrong to change your mind. It is only wrong to change your mind and do nothing about it.

Changing Your Mind, Investing, Mind, Nothing, Wrong

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.

Pieces, Paper, Remember, Gyrate

Most investors are primarily oriented toward return, how much they can make and pay little attention to risk, how much they can lose.

Risk, Attention, Investing, Return, Make

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

Continuity, Investment, Investors, Process, Relentless

It's incredibly important to note that when you don't allow failure, you get more failure.

Important, Notes, Incredibly, Failure, Allow, Note

In the financial markets, however, the connection between a marketable security and the underlying business is not as clear-cut. For investors in a marketable security the gain or loss associated with the various outcomes is not totally inherent in the underlying business; it also depends on the price paid, which is established by the marketplace. The view that risk is dependent on both the nature of investments and on their market price is very different from that described by beta.

Cutting, Gain, Loss, Nature, View, Views

Value investing by its very nature is contrarian.

Contrarian, Investing, Nature, Value, Values

Over the long run, the crowd is always wrong.

Crowd, Crowds, Long, Run, Running, Wrong

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