A Quote by Jane Bryant Quinn
You normally don't get a margin call unless your securities, minus the debt, are worth 30% or less of their nominal market value.
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We don't understand the equity market well, and so we deploy funds in fixed-income securities, and like any other securities, investment in those securities also need to follow the mark-to-market accounting principle.
My net worth is the market value of holdings less the tax payable upon sale. The liability is just as real as the asset unless the value of the asset declines (ouch), the asset is given away (no comment), or I die with it. The latter course of action would appear to at least border on a Pyrrhic victory.
There is a bit of a problem with the match between derivative securities markets and the primary markets. We have long ago instituted principles, essentially high margin requirements, to prevent certain instabilities in the stock market, and I think they're basically correct. The trouble is that there's a linkage, let's say, between something like the stock market and the index futures markets, and the fact that the margin requirements are very different, for example, played some role in the October '87 crash.
Reason is not like the goods sold in the market places--the more plentiful they are, the less they are worth. Reason's worth waxes with her abundance. But were she sold in the market, it is only the wise man who would understand her true value.
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.
If you don't know your own value, somebody will tell you your value, and it'll be less than you're worth.
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."
Most people don't know this, but if you settle a debt for less than the amount you owed, you are potentially responsible for taxes on the forgiven debt. Look at it this way: You received goods and services for the full amount of debt, but you're only paying for a portion of it - sometimes less than 50%. Anything more than $600 is generally considered taxable, but the IRS will sometimes waive the tax if you can prove that your assets were less than your liabilities when the debt was settled.
I have gained value like an antique. If there is an '80s event, I normally get the call and that is a nice problem to have.
When I get hurt in the market, I get the hell out. It doesn't matter at all where the market is trading. I just get out, because I believe that once you're hurt in the market, your decisions are going to be far less objective than they are when you're doing well If you stick around when the market is severely against you, sooner or later they are going to carry you out.
Mr. Market does not always price stocks the way an appraiser or a private buyer would value a business. Instead, when stocks are going up, he happily pays more than their objective value; and, when they are going down, he is desperate to dump them for less than their true worth.
There are two ways to approach the market. You can guess which direction prices will go in next, or you can figure out what businesses and their securities are really worth.
Housing wealth - the net equity held by households, consisting of the value of their homes minus their mortgage debt - is the most important source of wealth for all but those at the very top.
The share price must be less than book value. Preferably it will be less than net working capital less long term debt.
Market value is irrelevant to intrinsic value. ... Unqualified judgment can at most claim to decide the market-value - a value that can be in inverse proportion to the intrinsic value.
Your wealth is the value of your assets - your retirement accounts, your home, the unsold stocks - minus your debts, like your credit-card bill and your mortgage.
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