A Quote by Seth Klarman

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.

Seth Klarman

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Achieved Allow Bad Bad Luck Below Changing Complex Error Extreme Human Human Error Luck Margin Prices Purchased Rapidly Safety Securities Underlying Unpredictable Value Volatility World

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Seth Klarman
American - Author
Born: May 21, 1957

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."

Michael Mauboussin

Alan White and I spent the next two or three years working together on this. We developed what is known a stochastic volatility model. This is a model where the volatility as well as the underlying asset price moves around in an unpredictable way.

John Hull

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.

Franco Modigliani

Volatility is a symptom that people have no idea of the underlying value.

Jeremy Grantham

While I take no pleasure in others' misfortunes, we've historically made most of our profits from other investors behaving in a panicked and irrational fashion and selling us certain stocks at prices far below their intrinsic value. More volatility equals cheaper stocks, which equals higher returns.

Whitney Tilson

You normally don't get a margin call unless your securities, minus the debt, are worth 30% or less of their nominal market value.

Jane Bryant Quinn

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.

Benjamin Graham

We must dare to think 'unthinkable' thoughts. We must learn to explore all the options and possibilities that confront us in a complex and rapidly changing world.

J. William Fulbright

Our healthcare environment is incredibly complex and is changing rapidly.

Kathy Giusti

Volatility is a symptom that people have no idea of the underlying value-that they have stopped playing the asset game. They're not buying because it's a company with certain attributes. They're buying because the price is rising. People are playing games not related to any concept at all of what the long-term value of the enterprise is. And they know it.

Jeremy Grantham

Human behavior is an enormously complex set of things, and that mixture of underlying things is different for different people, so it's not just complex, it's meta-complex.

Vivienne Ming

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.

Warren Buffett

On a given day, you can have market fluctuations where prices fluctuate far more than the underlying economic value of the unit.

N. Murray Edwards

It is an unfortunate fact that great and foolish excess can come into prices of common stocks in the aggregate. They are valued partly like bonds, based on roughly rational projections of use value in producing future cash. But they are also valued partly like Rembrandt paintings, purchased mostly because their prices have gone up, so far.

Charlie Munger

Fundamental analysis seeks to establish how underlying values are reflected in stock prices, whereas the theory of reflexivity shows how stock prices can influence underlying values

George Soros

Touch is more important than arm strength. You want to really allow the receiver to run underneath the throw. It'll give you a little margin for error if you undershoot it a bit.

Aaron Rodgers

A Quote by Seth Klarman

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