Buffett emphasizes the importance of a margin of safety from "summary" of The Warren Buffett Portfolio by Robert G. Hagstrom
Warren Buffett's investment philosophy can be summed up in one key principle: always aim for a margin of safety. This concept lies at the heart of his approach to investing. Buffett believes that in order to protect one's capital and minimize the risk of permanent loss, it is essential to purchase securities at a significant discount to their intrinsic value. By doing so, investors create a buffer that can withstand unforeseen market fluctuations and economic downturns. This margin of safety serves as a form of insurance against the inherent uncertainties of the market. It provides a cushion that allows investors to weather periods of volatility without being forced to sell their holdings at a loss. Buffett's emphasis on this principle is a reflection of his...
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