A Quote by Peter Cundill
Protect the downside. Worry about the margin of safety.
Related Quotes
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."
We always look at the margin of safety in the balance sheet and then worry about the business.
We live in a fantastically wealthy country. We don't have to worry about food. We don't have to worry about clothing. We don't have to worry about our safety. It's very easy for me to be an environmentalist. It's very easy for me to care about making sure that we protect the forests and the whales, and all that stuff.
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.
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.
We're wealthy people. We're sitting here in New York, Washington. We live in a fantastically wealthy country. We don't have to worry about food. We don't have to worry about clothing. We wore the same shirt. We don't have to worry about our safety. It's very easy for us to be environmentalists. It's very easy for me to be an environmentalist. It's very easy for me to care about making sure that we protect the forests and the whales, and all that stuff. It's very hard for someone who makes $1,000 a year or some who makes less than $1 a day to care about the environment.
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.
So one way to create an attractive risk/reward situation is to limit downside risk severely by investing in situations that have a large margin of safety. The upside, while still difficult to quantify, will usually take care of itself. In other words, look down, not up, when making your initial investment decision. If you don’t lose money, most of the remaining alternatives are good ones.
In engineering, people have a big margin of safety. But in the financial world, people don't give a damn about safety. They let it balloon and balloon and balloon. It's aided by false accounting.
Let me have my tax money go for my protection and not for my prosecution. Let my tax money go for the protection of me. Protect my home, protect my streets, protect my car, protect my life, protect my property...worry about becoming a human being and not about how you can prevent others from enjoying their lives because of your own inability to adjust to life.
No matter that astronauts and cosmonauts had perished in precisely designed and carefully tested machines. Solid engineering could always provide a safety margin, because the engineers believed, there was complete safety in numbers.
But we agree with the NTSB that if we eliminated the thrust- reverser calculation, it would be an extra margin of safety. Airport capacity and airline efficiency are important, but safety is the most important thing.
If we start - premise that the information is mine, and we give the individual's rights, we worry about what happens during a breach. If you try to protect access to it, as opposed to not even making it available, you have less to worry about who will break the wall.
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.
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.
I'm scared about everything. I'm an anxious worrier. I worry about the downside of everything.
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