Avoiding Quote by Seth Klarman
“As value investors, our business is to buy bargains that financial market theory says do not exist. We've delivered great returns to our clients for a quarter century-a dollar invested at inception in our largest fund is now worth over 94 dollars, a 20% net compound return. We have achieved this not by incurring high risk as financial theory would suggest, but by deliberately avoiding or hedging the risks that we identified.”
About This Quote
Source Book: Margin of Safety, Seth Klarman, 1991
Value investors profit by buying undervalued assets and managing risk, not by taking high‑risk bets.
In simple terms: Buy cheap, hedge risk.
Key Takeaway
Invest in undervalued assets with risk controls.
Themes
investment
value
risk management
Mood
analytical
pragmatic
Type
financial
educational
When to use this quote
- portfolio construction
- retirement planning
- business acquisition
Key Concepts
Efficient market hypothesis
margin of safety
compound returns
Questions to Reflect On
- How do you identify hidden risk?
- What safeguards protect your investments?
A Different Perspective
Market may stay irrational longer than expected.
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