Klarman: Investors must view the market as an erratic counterparty, not validator
Seth Klarman · Seth Klarman – Timeless Value Investing (EP.328) · Jul 17, 2023 · at 26:33
Seth Klarman, CEO of The Baupost Group, explains why successful value investors cannot rely on market price movements for feedback or validation.
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“If you look to the market for feedback, the market might regularly say, you're an idiot, you bought it, now it's down, you don't know what you're doing, but the reality is that you've got to see that a little bit differently. You've got to see that as the market is now offering you a better bargain, Either you have confidence in yourself, or you believe in the market as giving you valuable information. And then as Graham and Buffett say, if you look to the market for the answers, you're going to just be following popular opinion. But if you look to the market as a manic counterparty that sometimes sells you something at a big discount from what it's worth, and other times pays you more than it's worth, now you're talking. Now you're going to be able to take advantage of the erratic market. To profit as an investor.”
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