Brazil had one of the most concentrated banking systems in the world — five banks controlled over 80% of all deposits — and yet it was one of the most profitable banking systems in the world. The banks were making enormous returns, 20-25% return on equity, while charging customers 300-400% annual interest rates on credit cards.
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The market can stay irrational longer than you can stay solvent, but the truly dangerous corollary is that you can be right about the business and still go broke because you were wrong about the timing. Patience without a balance sheet to survive on is just wishful thinking.
Seth Klarman — Margin of Safety
The single greatest edge an investor can have is a long-term orientation that makes you a natural seller to institutions that are forced to sell into panic. Most of your advantage in investing comes not from being smarter, but from having a longer time horizon than someone who structurally cannot.
Seth Klarman — Baupost Group Annual Letter
Most people think diversification is about owning many things. It's actually about owning things that are wrong at different times and for different reasons. The goal isn't to avoid being wrong — it's to ensure that being wrong never kills you.
Howard Marks — Mastering the Market Cycle