📖Seth Klarman
Character Over IQ
Discipline matters more than intelligence in investing.
Investing success has more to do with character — patience, discipline, rationality — than with intelligence. The best investors aren't the smartest; they're the most disciplined.
🏠 Everyday Analogy
📖 Core Interpretation
Seth Klarman advocates a repeatable process: define criteria, execute consistently, and review decisions against evidence. Process quality drives outcome consistency.
💎 Key Insight：Character traits drive investment success more than IQ.
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❓ Why It Matters
Without process, there is no reliable feedback loop. Structured execution and review improve decision quality over time.
🎯 How to Practice
Run a decision loop of research, thesis, execution, and post-mortem; document assumptions and update playbooks with evidence, not hindsight bias.
⚠️ Common Pitfalls
Having opinions without execution criteria
Reviewing outcomes but not decisions
Abandoning rules during volatility spikes
📚 Case Studies
1
Post-Crash Value Screening (1987)
After the 1987 crash, Klarman’s team performed bottom-up analysis on dozens of bombed-out equities, focusing on balance sheets, asset coverage, and downside protection rather than macro forecasts.
✨ Outcome：Accumulated deeply discounted securities; several doubled or more over the next few years as valuations normalized.
2
Distressed Telecom Bonds (2001)
Following the dot-com bust, many telecom firms’ debt traded at distressed levels. Klarman’s bottom-up work emphasized liquidation values, spectrum assets, and priority in the capital structure instead of industry growth projections.
✨ Outcome：Selected a few issues with strong asset backing; earned high-risk-adjusted returns as credits restructured and prices rebounded.
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