The Power of Margin of Safety
On one of the central concepts of investing that provides significant legroom to investors at turbulent times and secures us from unexpected and groundless losses.
On the Edge of a Cliff
Yes, this is how you should see it, like you are on the edge of a cliff. But in investing you can never know this. If it was possible to know when you are at the edge of a cliff, everybody would step back. No, internalizing the principle of margin of safety begins with assuming you may be at the edge of a cliff. Think it like this,…