“In capital markets, price is set by the most panicked seller at the end of a trading day. Value, which is determined by cash flows and assets, is not. In this environment, the chaos is so extreme, the panic selling so urgent, that there is almost no possibility that sellers are acting on superior information. Indeed, in situation after situation, it seems clear that fundamentals do not factor into their decision making at all.” – Seth Klarman

In a recent issue of the Idea Farm, Meb Faber starts a great profile on investing demigod Seth Klarman with this quote. Really stop for a minute and re-read it a couple times. Print it out and tape it to your monitor. Next time you live through a good market crash, recite it like holy writ.

The dirty little secret of the money management profession is that we all have Klarman envy. We don't just want his returns; we actually want to be him, have his super-human emotional control, and be able to wield that power of that brain of his.

Alas, all of us mortals will have to settle for reading his out-of-print book–which sells on Amazon for thousands of dollars. So desperate are value investors to get their hands on a copy of Margin of Safety, I expect that plenty would be willing to do back-alley deals with men in trenchcoats.

At any rate, here is an excerpt of the profile: