Margin Of Safety Quotes & Sayings

As a matter of fact I trade in accordance to my means and always leave myself an ample margin of safety. — Edwin Lefevre

No matter how careful you are, the one risk no investor can ever eliminate is the risk of being wrong. Only by insisting on what Graham called the "margin of safety" - never overpaying, no matter how exciting an investment seems to be - can you minimize your odds of error. — Benjamin Graham

Is it wholly fantastic to admit the possibility that Nature herself strove toward what we call beauty? Face to face with any one of the elaborate flowers which man's cultivation has had nothing to do with, it does not seem fantastic to me. We put survival first. But when we have a margin of safety left over, we expend it in the search for the beautiful. Who can say that Nature does not do the same? — Joseph Wood Krutch

Even with a margin of safety in the investor's favor, an individual security may work out badly. For the margin guarantees only that he has a better chance for profit than for loss - not that loss is impossible. But as the number of such commitments is increased the more certain does it become that the aggregate of the profits will exceed the aggregate of the losses. — Benjamin Graham

If you understood a business perfectly and the future of the business, you need very little in the way of a margin of safety. — Warren Buffett

High leverage is unsafe, not just for a company but the entire economy ... LBOs are reducing the safety. Management loses the power to do many things. It has no margin for error and less margin for additional risk. — Franco Modigliani

Proper accounting is like engineering. You need a margin of safety. Thank God we don't design bridges and airplanes the way we do accounting. — Charlie Munger

Protect the downside. Worry about the margin of safety. — Peter Cundill

We always look at the margin of safety in the balance sheet and then worry about the business. — Peter Cundill

But we agree with the NTSB that if we eliminated the thrust- reverser calculation, it would be an extra margin of safety. Airport capacity and airline efficiency are important, but safety is the most important thing. — Laura Brown

There is just no way that I can understand in God's green earth that an airline could undertake with its normal procedures the operation of the Space Shuttle ... You don't put parachutes on airliners because the margin of safety is built into the machine. The 727 airplanes we fly are proven vehicles with levels of safety and redundancy built in. The shuttle is a hand-made piece of experimental gear. — Frank Borman

There are three important principles to Graham's approach. [The first is to look at stocks as fractional shares of a business, which] gives you an entirely different view than most people who are in the market. [The second principle is the margin-of-safety concept, which] gives you the competitive advantage. [The third is having a true investor's attitude toward the stock market, which] if you have that attitude, you start out ahead of 99 percent of all the people who are operating in the stock market - it's an enormous advantage. — Warren Buffett

Confronted with a challenge to distill the secret of sound investment into three words, we venture the motto, Margin of Safety. — Benjamin Graham

To have a true investment, there must be a true margin of safety. And a true margin of safety is one that can be demonstrated by figures, by persuasive reasoning, and by reference to a body of actual experience. — Benjamin Graham

No matter that astronauts and cosmonauts had perished in precisely designed and carefully tested machines. Solid engineering could always provide a safety margin, because the engineers believed, there was complete safety in numbers. — William E. Burrows

In engineering, people have a big margin of safety. But in the financial world, people don't give a damn about safety. They let it balloon and balloon and balloon. It's aided by false accounting. — Charlie Munger

Governments are necessarily continuing concerns. They have to keep going in good times and in bad. They therefore need a wide margin of safety. If taxes and debt are made all the people can bear when times are good, there will be certain disaster when times are bad. — Calvin Coolidge

It is our argument that a sufficiently low price can turn a security of mediocre quality into a sound investment opportunity - provided that the buyer is informed and experienced and he practices adequate diversification. For, if the price is low enough to create a substantial margin of safety, the security thereby meets our criterion of investment. — Benjamin Graham

THE BEAUTY OF VALUE INVESTING is its logical simplicity. It is based on two principles: What's it worth (intrinsic value), and don't lose money (margin of safety). — Christopher H. Browne

Though Moltke was working with subordinates who were totally lacking in comprehension for whatever strategic plans he may have entertained and who on occasion abused the independence granted them, those plans were sufficiently flexible to accommodate errors; that is, a large safety margin was left to ensure that mistakes would not develop into catastrophes. — Martin Van Creveld

They went together to the pond. The frogs, frozen by the movement, sat still. Fourteen golden eyes like nuggets gleamed unwinking from the margin. Some squatted on dead reeds and immersed branches. Tranced by the half-apprehended movement above them they relied for safety upon immobility. Some hung by one slim hand like children to a raft. All had been stricken to stone by the human appearance. Only the sun, shifting in the sky, tickled the fire in the nuggets in their green heads. — Enid Bagnold

The three most important words in investing ... Margin of Safety. — Warren Buffett

There is a close logical connection between the concept of a safety margin and the principle of diversification. — Benjamin Graham

Bernanke and company are trying to reflate the economy with almost stated objective of inflation at 2 percent and higher in order to provide some type of safety margin for a future recession. That's where they want to go. — Bill Gross

Investors frequently benefit from making decisions with less than perfect knowledge and are well rewarded for bearing the risk of uncertainty. The time other investors spend delving into the last unanswered detail may cost them the chance to buy into situations at prices so low they offer a margin of safety despite the incomplete information — Seth Klarman

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. — Seth Klarman

The function of the margin of safety is, in essence, that of rendering unnecessary an accurate estimate of the future. — Benjamin Graham

The difference between the price we pay for a stock and its liquidation value gives us a margin of safety. This kind of investing is one of the most effective ways of achieving good long term results. — Peter Cundill

One of the dangers about net-net investing is that if you buy a net-net that begins to lose money your net-net goes down and your capacity to be able to make a profit becomes less secure. So the trick is not necessarily to predict what the earnings are going to be but to have a clear conviction that the company isn't going bust and that your margin of safety will remain intact over time. — Peter Cundill

Nothing irrevocable had yet been spoken, but there was only the barest margin of safety left them, each of them moving delicately along the outskirts of an open question, and, once spoken, such a question-as "Do you love me?" -could never be answered or forgotten. They walked slowly, meditating, wondering, and the path sloped down from their feet and they followed, walking side by side in the most extreme intimacy of expectation; their feinting and hesitation done with, they could only await passively for resolution. Each knew, almost within a breath, what the other was thinking and wanting to say; each of them almost wept for the other. They perceived at the same moment the change in the path and each knew then the other's knowledge of it; Theodora took Eleanor's arm and, afraid to stop, they moved on slowly, close together, and ahead of them the path widened and blackened and curved. — Shirley Jackson

Edge also implies what Ben Graham ... called a margin of safety. You have a margin of safety when you buy an asset at a price that is substantially less than its value. As Graham noted, the margin of safety 'is available for absorbing the effect of miscalculations or worse than average luck.' ... Graham expands, "The margin of safety is always dependent on the price paid. It will be large at one price, small at some higher price, nonexistent at some still higher price." — Michael Mauboussin

There are only a few things investors can do to counteract risk: diversify adequately, hedge when appropriate, and invest with a margin of safety. It is a precisely because we do not and cannot know all the risks of an investment that we strive to invest at a discount. The bargain element helps to provide a cushion for when things go wrong. — Seth Klarman