For those who don’t know, Seth Klarman, who runs Baupost Group is one of the best hedge fund managers of our time. He has generated a stunning rate of return for several decades and his hedge fund now manages in excess of $22 billion. He is also famous for writing one of the best and most expensive books on value investing ever, Margin of Safety. This impressive piece of work regularly sells for more than a thousand dollars, because fund managers everywhere are desperate to learn the wisdom contained in its page. Here is a few memorable quotes by Klarman via MarketFolly:

Targeting investment returns leads investors to focus on potential upside rather on downside risk … rather than targeting a desired rate of return, even an eminently reasonable one, investors should target risk.

A margin of safety is achieved when securities are purchased at prices sufficiently below underlying value to allow for human error, bad luck, or extreme volatility in a complex, unpredictable and rapidly changing world.
The trick of successful investors is to sell when they want to, not when they have to. Investors who may need to sell should not own marketable securities other than U.S. Treasury Bills.
Read more: http://www.marketfolly.com/2012/04/notes-from-seth-klarmans-margin-of.html#ixzz1w6DgWz4F

So what can we take away from this? Focus on managing your risk and let returns take care of themselves. Make sure the price you pay for a security is low enough that even if bad things happen you will still make money when value asserts itself. Have lots of cash on hand so that you can be a buyer when there are people who are forced to sell, never put yourself in a situation when you can end up being a forced seller.