At the worst possible moment, when your fund is down because cheap things have gotten cheaper, you need … - Seth Klarman

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Quote of the day

The one who is [truly] imprisoned is the one whose heart is imprisoned from Allah and the captivated one is the one whose desires have enslaved him.

Seth Klarman

At 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.

Add, Cheap, Down, Gotten, Needs, Phones

Same Author Quotes

Selling, in particular, can be a challenge; many investors are tempted to become more optimistic when a security is performing well. This temptation must be resisted; tax considerations aside, when a security reaches full valuation, there is no longer a reason to own it.

Become, Challenges, Optimistic, Reason, Temptation

Value in relation to price, not price alone, must determine your investment decisions. If you look to Mr Market as a creator of investment opportunities (where price departs from underlying value), you have the makings of a value investor. If you insist on looking to Mr Market for investment guidance however, you are probably best advised to hire someone else to manage your money.

Alone, Decision, Hire, Looks, Makings, Opportunity

The inability to hold cash and the pressure to be fully invested at all times meant that when the plug was pulled out of the tub, all boats dropped as the water rushed down the drain.

Cash, Drain, Inability, Plug, Times, Water

When excesses such as lax lending standards become widespread and persist for some time, people are lulled into a false sense of security, creating an even more dangerous situation. In some cases, excesses migrate beyond regional or national borders, raising the ante for investors and governments. These excesses will eventually end, triggering a crisis at least in proportion to the degree of the excesses. Correlations between asset classes may be surprisingly high when leverage rapidly unwinds.

Class, Correlations, Creating, Dangerous Situations, Lax

Be sure that you are well compensated for illiquidity - especially illiquidity without control - because it can create particularly high opportunity costs.

Compensated, Cost, Costs, Opportunity, Wells