Seth Klarman Annual Letter in Outstanding Investor Digest

Outstanding Investor Digest has a free excerpt (pdf) from their March 2009 news letter that features Seth Klarman’s annual letter to investors.

Some of the best quotes are below:

Sometimes being too early becomes indistinguishable from being wrong.

So I just think it’s incredibly important to note that when you don’t allow failure, you get more failure. When you take away the price of personal risk in your decisions, you get much more risk taking.

.. value investors own bargains — securities trading at a discount to underlying value which confer a margin of safety. This doesn’t mean those holdings can’t or won’t drop in price; it means that when they decline, they’ll be an even better bargain to which you are likely to seek to add.

Value investing is at its core the marriage of a contrarian streak and a calculator.

The way to maximize outcome is to concentrate on the process.

Via SS

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