Quotes of the Day: Seth Klarman

"One day a physicist, a biologist, and an economist were sitting at a café across from an apparently empty building. They watch two people enter and then, later, three leave. The physicist says, "Apparently there was some error with our measurements," while the biologist says, "Obviously, they reproduced while in the building." Then the economist observes, "If another person were to enter the building, it would once again be empty."

~ Seth Klarman

"Leverage is always a double-edged sword, and in 2007 excessive leverage at all levels of the economy had eroded our nation's margin of safety. When things went wrong in 2008, we' had nothing to fall back on. There was no room for error, little cushion to give us time to refocus and rebuild. Today, with massive deficits and even higher government debt, we have less margin for error than we did four years ago. What might we do instead of today's unsuccessful, misguided, and dangerous programs? Jim Grant, in a CNBC interview several months ago, had one suggestion: perhaps we should try capitalism. Let's allow markets to operate freely; let's allow the invisible hand to work its magic; let's once again permit failure."

~ Seth Klarman