A Quote by Benjamin Graham
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.
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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."
If you understood a business perfectly and the future of the business, you would need very little in the way of a margin of safety. So, the more vulnerable the business is, assuming you still want to invest in it, the larger margin of safety you'd need. If you're driving a truck across a bridge that says it holds 10,000 pounds and you've got a 9,800 pound vehicle, if the bridge is 6 inches above the crevice it covers, you may feel okay, but if it's over the Grand Canyon, you may feel you want a little larger margin of safety.
And do not be paralyzed. It is better to move than to be unable to move, because you fear loss so much: loss of order, loss of security, loss of predictability.
When individual enterprise is free and unhampered, profit-and-loss calculations set precise limits to a businessman's temptations to expand his services... a government valuable they may be, have no market price and, therefore, cannot be subjected to profit-and-loss accounting.
The [liberals] consider profits as objectionable. The very existence of profits is in their eyes a proof that wage rates could be raised without harm to anybody. They speak of profit without dealing with loss. Profit and loss are the instruments by means of which the consumers keep a tight rein on all business activities. A profitable enterprise tends to expand; an unprofitable one tends to shrink. The elimination of profit renders production rigid and abolishes the consumer's control.
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.
That, in essence, is the catastrophe of suicide for those who survive: not only the loss of someone, but the loss of the chance to persuade that person to act differently, the loss of the chance to connect.
There can be no profit in the making or selling of things to be destroyed in war. Men may think that they have such profit, but in the end the profit will turn out to be a loss.
By a 2-1 margin, voters believe that Donald Trump would change business as usual in Washington, but by almost as large a margin, they believe that Hillary Clinton would be better in a crisis and less of a decisive margin she cares about people like them.
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.
Even if the dollar does decline during the coming months, the delays in the response of exports and imports to the more competitive dollar will mean that the increase in aggregate demand from this source may not happen for a year or more.
The perception of potential threats to survival may be much more important in determining behavior than the perceptions of potential profits, so that profit maximization is not really the driving force. It is fear of loss rather than hope of gain that limits our behavior.
History has taught us: never underestimate the amount of money, time, and effort someone will expend to thwart a security system. It's always better to assume the worst. Assume your adversaries are better than they are. Assume science and technology will soon be able to do things they cannot yet. Give yourself a margin for error. Give yourself more security than you need today. When the unexpected happens, you'll be glad you did.
Capital does not 'beget profit' as Marx thought. The capital goods as such are dead things that in themselves do not accomplish anything. If they are utilized according to a good idea, profit results. If they are utilized according to a mistaken idea, no profit or losses result. It is the entrepreneurial decision that creates either profit or loss.
We lost not only through death, but also by leaving and being left, by changing and letting go and moving on. And our losses include not only our separations and departures from those we love, but our conscious and unconscious losses of romantic dreams, impossible expectations, illusions of freedom and power, illusions of safety -- and the loss of our own younger self, the self that thought it would always be unwrinkled and invulnerable and immortal.
Instead of hoping he must fear and instead of fearing he must hope. He must fear that his loss may develop into a much bigger loss, and hope that his profit may become a big profit.
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