Do not trust financial market risk models. Despite the predilection of some analysts to model the financial markets using sophisticated mathematics, the markets are governed by behavioral science, not physical science.
Seth KlarmanValue investors have to be patient and disciplined, but what I really think is you need not to be greedy. If you're greedy and you leverage, you blow up. Almost every financial blow up is because of leverage.
Seth KlarmanPatience and discipline can make you look foolishly out of touch until they make you look prudent and even prescient
Seth KlarmanDon't short many stocks. Instead they hedge for tail risk with CDS and options. They are happy to incur illiquidity
Seth Klarman