Margin of safety crucial for risk management from "summary" of Essays of Warren Buffett by Lawrence A. Cunningham
Warren Buffett stresses the importance of having a margin of safety when it comes to risk management. This concept involves being cautious and leaving room for error when making investment decisions. By allowing for a margin of safety, investors can protect themselves from potential losses and unexpected events that may arise. Buffett believes that it is crucial to have a buffer in place to account for uncertainties in the market. This margin of safety provides a cushion that can help investors weather turbulent times and avoid making impulsive decisions. It allows for a more conservative approach to investing, which can ultimately lead to more stable and sustainable returns in the long run. When investors overlook the importance of a margin of ...
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