Money and Finance
- How Much Research And Analysis Are Sufficient?
From Seth Klarman, via Margin of Safety:How Much Research and Analysis Are Sufficient? Some investors insist on trying to obtain perfect knowledge about their impending investments, researching companies until they think they know everything there...
- Seth Klarman On Worrying About Asset Deflation...
From Seth Klarman, via Margin of Safety:Should investors worry about the possibility that business value may decline? Absolutely. Should they do anything about it? There are three responses that might be effective. First, since investors cannot predict...
- The Complexity And Variability Of Business Valuation
From Seth Klarman, via Margin of Safety:The Complexity and Variability of Business Valuation It would be a serious mistake to think that all the facts that describe a particular investment are or could be known. Not only may questions remain unanswered;...
- 30 Big Ideas From Seth Klarman’s Margin Of Safety
Link to: 30 Big Ideas from Seth Klarman’s Margin of Safety ...
- Recent Transactions
Today I sold 2 option contracts in an attempt to add some more income. The first contract that I sold was the BAC Jan 18 2014 $7 Put for $1.73. If the option gets exercised then my cost basis for this transaction will be $5.27. If the option expires then...
Money and Finance
Seth Klarman quote
From Seth Klarman, via Margin of Safety:
Because investing is as much an art as a science, investors need a margin of safety. 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. According to Graham, “The margin of safety is always dependent on the price paid. For any security, it will be large at one price, small at some higher price, non-existent at some still higher price!”.
Buffett described the margin of safety concept in terms of tolerances: “When you build a bridge, you insist it can carry 30,000 pounds, but you only drive 10,000 pound trucks across it. And that same principle works in investing!”.
What is the requisite margin of safety for an investor? The answer can vary from one investor to the next. How much bad luck are you willing and able to tolerate? How much volatility in business values can you absorb? What is your tolerance for error? It comes down to how much you can afford to lose.
- How Much Research And Analysis Are Sufficient?
From Seth Klarman, via Margin of Safety:How Much Research and Analysis Are Sufficient? Some investors insist on trying to obtain perfect knowledge about their impending investments, researching companies until they think they know everything there...
- Seth Klarman On Worrying About Asset Deflation...
From Seth Klarman, via Margin of Safety:Should investors worry about the possibility that business value may decline? Absolutely. Should they do anything about it? There are three responses that might be effective. First, since investors cannot predict...
- The Complexity And Variability Of Business Valuation
From Seth Klarman, via Margin of Safety:The Complexity and Variability of Business Valuation It would be a serious mistake to think that all the facts that describe a particular investment are or could be known. Not only may questions remain unanswered;...
- 30 Big Ideas From Seth Klarman’s Margin Of Safety
Link to: 30 Big Ideas from Seth Klarman’s Margin of Safety ...
- Recent Transactions
Today I sold 2 option contracts in an attempt to add some more income. The first contract that I sold was the BAC Jan 18 2014 $7 Put for $1.73. If the option gets exercised then my cost basis for this transaction will be $5.27. If the option expires then...