A Quote by Seth Klarman
It is always easiest to run with the herd; at times, it can take a deep reservoir of courage and conviction to stand apart from it. Yet distancing yourself from the crowd is an essential component of long-term investment success.
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Occasionally we are asked whether it would make sense to modify our investment strategy to perform better in today's financial climate. Our answer, as you might guess, is: No! It would be easyfor us to capitulate to the runaway bull market in growth and technology stocks. And foolhardy. And irresponsible. And unconscionable. It is always easiest to run with the herd; at times, it can take a deep reservoir of courage and conviction to stand apart from it. Yet distancing yourself from the crowd is an essential component of long-term investment success.
Pressure to produce over the short term - a gun to the head of everyone - encourages excessive risk taking which manifests itself in several ways - fully invested posture at all times, the use of leverage, and a market centric orientation that makes it difficult to stand apart from the crowd and take a long term perspective.
You need courage to be creative. You need the courage to see things differently, courage to go against the crowd, courage to take a different approach, courage to stand alone, if you have to, courage to choose activity over inactivity.
Deep down in the human spirit, there is a reservoir of courage. It is always available, always waiting to be discovered.
But it may be one of our best markets in the long term because when the Japanese society embraces a brand it is a very deep connection, so we're willing to make that investment knowing that it's not the quick route to success that might be in other countries.
A lot of people are not comfortable being apart from the group, from the whole herd, and listening to the inner voice. They just follow what the crowd does and wear what the crowd wears and think what the crowd thinks. They get very caught up in doing what the world says is the cool thing to do and living the way the rest of the world lives. Once we make a decision to break away from that and not be part of the herd anymore - by going inside and finding our own voice - then life just becomes magical.
While some might mistakenly consider value investing a mechanical tool for identifying bargains, it is actually a comprehensive investment philosophy that emphasizes the need to perform in-depth fundamental analysis, pursue long-term investment results, limit risk, and resist crowd psychology.
Young people, under the social contract, suggest a long term investment. What we have today is a government that believes that young people - since they are a long term investment - are a liability. This is system that only believes in short-term investments.
Remember to dream big, think long-term, underachieve on a daily basis, and take baby steps. That is the key to long-term success.
The culture of the mutual fund industry, when I came into it in 1951, was pretty much a culture of fiduciary duty and investment, with funds run by investment professionals. The firm I worked with, Wellington Management Co., they had one fund. That was very typical in the industry... investment professionals focused on long-term investing.
There comes a point in every story where you have got a reservoir of knowledge, and you are then really just adding the substantial new facts to your understanding of it. That is the easiest situation, because you can call on that reservoir, but when you get a sudden story out of nowhere, like ebola, you don't have a reservoir of knowledge.
When you take a stand out of deep conviction, people know. They may not even agree, but they ask, 'Do I want someone who is willing to take a hard stand and someone I can trust to do that when the chips are down?' They want that.
You know what it takes to win. Just look at my fist. When I make a fist, it's strong and you can't tear it apart. As long as there's unity, there's strength. We must become so close with the bonds of loyalty and sacrifice, so deep with the conviction of the sole purpose, that no one, no group, no thing, can ever tear us apart.
Having clients with a long-term orientation is crucial. Nothing else is as important to the success of an investment firm.
Over the long term, despite significant drops from time to time, stocks (especially an intelligently selected stock portfolio) will be one of your best investment options. The trick is to GET to the long term. Think in terms of 5 years, 10 years and longer. Do your planning and asset allocation ahead of time. Choose a portion of your assets to invest in the stock market - and stick with it! Yes, the bad times will come, but over the truly long term, the good times will win out - and I hope the lessons from 2008 will help get you there to enjoy them.
The ability to discipline yourself to delay gratification in the short term in order to enjoy greater rewards in the long term, is the indispensable prerequisite for success.
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