Approach Quote by Seth Klarman
“Right at the core, the mainstream has it backwards. Warren Buffett often quips that the first rule of investing is to not lose money, and the second rule is to not forget the first rule. Yet few investors approach the world with such a strict standard of risk avoidance.”
About This Quote
Source Book: Margin of Safety, 1991
Investors should prioritize avoiding losses above all, yet many ignore this fundamental principle, leading to higher risk exposure.
In simple terms: First rule: don’t lose money; second: remember it.
Key Takeaway
Focus on capital preservation.
Themes
risk avoidance
investment discipline
capital protection
Mood
cautious
strategic
Type
advice
philosophical
When to use this quote
- stock selection
- portfolio construction
- market downturns
- long‑term holding
Key Concepts
value investing
risk management
Questions to Reflect On
- How can you protect capital while seeking returns?
- When is it acceptable to take calculated risk?
A Different Perspective
Over‑emphasis on loss avoidance may limit upside potential.
