Value Investing
Margin of Safety: The Value Investor's Ultimate Protection
Margin of Safety is the principle of buying a security at a significant discount to its intrinsic value. It is the buffer against errors in judgment and the unpredictability of the future. While calculating what a business is worth is a critical skill, the margin of safety is what transforms that analysis into a profitable investment decision. It's not just a theory; it's a practical discipline that separates successful long-term investors from speculators. It is the most critical link between valuation and action. This guide will show you exactly how to calculate it and, more importantly, how to apply it systematically to protect your capital and enhance your returns.
Link to Finmode blog article