Margin of Safety

E315067

investment risk management principle value investing concept

Margin of Safety is a core value-investing principle emphasizing buying securities at prices significantly below their intrinsic value to reduce downside risk.

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All labels observed (2)

Label	Occurrences
Margin of Safety canonical	1
Margin of Safety: Risk-Averse Value Investing Strategies for the Thoughtful Investor	1

Statements (47)

Predicate	Object
instanceOf	investment risk management principle ⓘ value investing concept ⓘ
appliesTo	bonds ⓘ entire portfolios ⓘ other securities ⓘ stocks ⓘ
associatedWith	Benjamin Graham ⓘ David Dodd ⓘ Seth Klarman ⓘ Warren Buffett ⓘ
benefit	improves risk-adjusted returns over time ⓘ reduces impact of analytical mistakes ⓘ reduces impact of unforeseen negative events ⓘ
contrastsWith	paying fair value or overpaying for growth ⓘ reliance on precise forecasts ⓘ speculation based on price momentum ⓘ
coreIdea	buy securities at prices significantly below their estimated intrinsic value ⓘ
describedIn	Margin of Safety self-linksurface differs ⓘ surface form: Margin of Safety: Risk-Averse Value Investing Strategies for the Thoughtful Investor The Intelligent Investor ⓘ
emphasis	capital preservation ⓘ risk control over return maximization ⓘ
field	fundamental analysis ⓘ investment management ⓘ value investing ⓘ
influenced	modern value investing practices ⓘ
influencedBy	Benjamin Graham’s conservative investment philosophy ⓘ
keyComponent	conservative assumptions in valuation ⓘ discount from estimated intrinsic value ⓘ focus on downside risk rather than upside potential ⓘ intrinsic value estimation ⓘ
metricType	qualitative guideline rather than precise formula ⓘ
originatedIn	Security Analysis ⓘ
purpose	increase probability of satisfactory long-term returns ⓘ protect capital against errors in analysis ⓘ provide a buffer against adverse market developments ⓘ reduce downside risk ⓘ
relatedConcept	margin of safety in accounting ⓘ margin of safety in engineering ⓘ
requires	discipline in purchase price ⓘ independent fundamental analysis ⓘ patience to wait for favorable prices ⓘ
typicalImplementation	avoiding leverage that erodes the buffer ⓘ buying at a substantial discount to estimated intrinsic value ⓘ using conservative earnings or asset estimates ⓘ
underlyingAssumption	intrinsic value can be estimated within a range ⓘ markets can misprice securities ⓘ valuation estimates are subject to error ⓘ

Referenced by (2)

Full triples — surface form annotated when it differs from this entity's canonical label.

The Intelligent Investor → hasChapter → Margin of Safety ⓘ

Margin of Safety → describedIn → Margin of Safety self-linksurface differs ⓘ

this entity surface form: Margin of Safety: Risk-Averse Value Investing Strategies for the Thoughtful Investor