“An argument is made that there are
just too many question marks about the near future; wouldn’t it be better to
wait until things clear up a bit? You know the prose: “Maintain buying reserves
until current uncertainties are resolved,” etc. Before reaching for that
crutch, face up to two unpleasant facts: The future is never clear and you pay
a very high price for a cheery consensus. Uncertainty actually is the friend of
the buyer of long-term values.” -Warren Buffett
"Cash combined with courage in
a time of crisis is priceless." -Warren Buffett
“The most common cause
of low prices is pessimism – sometimes pervasive, sometimes specific to a
company or industry. We want to do business in such an environment, not because
we like pessimism but because we like the prices it produces.” -Warren Buffett
“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.” -Seth Klarman
"Interestingly, we have beaten
the market quite handsomely over this time frame, although beating the market
has never been our objective. Rather, we have consistently tried not to lose
money and, in doing so, have not only protected on the downside but also
outperformed on the upside." - Seth Klarman
“We work really hard never to get
confused with what we know from what we think or hope or wish.” -Seth Klarman
“The pessimist complains about the
wind; the optimist expects it to change; the realist adjusts the sails.”
-William Arthur Ward
"Out of clutter, find simplicity. From discord, find harmony. In the
middle of difficulty lies opportunity." -Albert Einstein
“In my opinion, there are two key concepts that investors must master:
value and cycles. For each asset you’re considering, you must have a
strongly held view of its intrinsic value. When its price is below that value,
it’s generally a buy. When its price is higher, it’s a sell. In a nutshell,
that’s value investing.
But values aren’t fixed; they move
in response to changes in the economic environment. Thus, cyclical
considerations influence an asset’s current value. Value depends on earnings,
for example, and earnings are shaped by the economic cycle and the price being
charged for liquidity.
Further, security prices are greatly
affected by investor behavior; thus we can be aided in investing safely by
understanding where we stand in terms of the market cycle. What’s going on in
terms of investor psychology, and how does it tell us to act in the short run?
We want to buy when prices seem attractive. But if investors are giddy and
optimism is rampant, we have to consider whether a better buying opportunity
mightn’t come along later.” –Howard Marks
Warren Edward Buffett
(born August 30, 1930) is an American business magnate, investor and
philanthropist. He was the most successful investor of the 20th century.
Buffett is the chairman, CEO and largest shareholder of Berkshire
Hathaway, and
consistently ranked among the world's wealthiest people. He was ranked
as the world's wealthiest person in 2008 and as the third wealthiest in
2011. In 2012 Time named Buffett one of the world's most influential
people.
Seth Klarman (born 1957)
is an American billionaire who founded the Baupost Group, a
Boston-based private investment partnership, and the author of a book on
value investing titled Margin of Safety: Risk-Averse Value Investing
Strategies for the Thoughtful Investor.
Albert Einstein ( 14 March 1879 – 18 April 1955) was a German-born theoretical physicist and philosopher of science. He developed the general theory of relativity, one of the two pillars of modern physics (alongside quantum mechanics).He is best known in popular culture for his mass–energy equivalence formula E = mc2 (which has been dubbed "the world's most famous equation").He received the 1921 Nobel Prize in Physics "for his services to theoretical physics, and especially for his discovery of the law of the photoelectric effect" The latter was pivotal in establishing quantum theory.
