You need humility to say 'I might be wrong.'

Having clients with a long-term orientation is crucial. Nothing else is as important to the success of an investment firm.

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

One thing I want to emphasize is that, like any human being, we can discuss our view of the economy and the market. Fortunately for our clients, we don't tend to operate based on the view. Our investment strategy is to invest bottom up, one stock at a time, based on price compared to value. And while we may have a macro view that things aren't very good right now - which in fact we feel very strongly we will put money to work regardless of that macro view if we find bargains. So tomorrow, if we found half a dozen bargains, we would invest all our cash.

If only one word is to be used to describe what Baupost does, that word should be: 'Mispricing'. We look for mispricing due to over-reaction.

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.

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