Individual and institutional investors alike frequently demonstrate an inability to make long-term investment decisions based on business fundamentals.
Seth KlarmanPeople should be highly sceptical of anyone's including their own, ability to predict the future, and instead pursue strategies that can survive whatever may occur.
Seth KlarmanThe average person canโt really trust anybody. They canโt trust a broker, because the broker is interested in churning commissions. They canโt trust a mutual fund, because the mutual fund is interested in gathering a lot of assets and keeping them. And now itโs even worse because even the most sophisticated people have no idea whatโs going on.
Seth KlarmanAt the worst possible moment, when your fund is down because cheap things have gotten cheaper, you need to have capital, to have clients who will actually love the phone call and-most of the time, if not all the time-add, rather than subtract, capital.
Seth KlarmanWhile no one wishes to incur losses, you couldn't prove it from an examination of the behavior of most investors and speculators. The speculative urge that lies within most of us is strong; the prospect of a free lunch can be compelling, especially when others have already seemingly partaken. It can be hard to concentrate on potential losses while others are greedily reaching for gains and your broker is on the phone offering shares in the latest "hot" initial public offering. Yet the avoidance of loss is the surest way to ensure a profitable outcome.
Seth Klarman