#1
Market as Servant, Not Master
"The stock market is designed to transfer money from the active to the patient. Be fearful when others are greedy, and greedy when others are fearful."
Use market emotions to your advantage.
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Warren Buffett🛡 Margin of Safety
Warren Buffett's Margin of Safety Rules
Warren Edward Buffett (born August 30, 1930) is an American businessman, investor, and philanthropist. He is the chairman and CEO of Berkshire Hathaway, a multinational conglomerate holding company. Known as the "Oracle of Omaha," Buffett is one of the most successful investors of all time with a net worth exceeding $100 billion. Under his leadership, Berkshire Hathaway's stock price has...
3 principles·Margin of Safety
3 Key Margin of Safety Principles
#2
Ignore Market Forecasts
"We have long felt that the only value of stock forecasters is to make fortune tellers look good. Forecasts may tell you a great deal about the forecaster; they tell you nothing about the future."
Market predictions are unreliable and should be ignored.
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Margin of Safety
"We insist on a margin of safety in our purchase price. If we calculate the value of a common stock to be only slightly higher than its price, we're not interested in buying."
Demand a significant discount to intrinsic value before buying — that gap is your protection.
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What are Warren Buffett's key margin of safety principles?
Warren Buffett has 3 key principles on margin of safety. The most important one is "Market as Servant, Not Master" — The stock market is designed to transfer money from the active to the patient.
How does Warren Buffett apply margin of safety in practice?
Warren Buffett applies margin of safety through several key principles including "Market as Servant, Not Master" and "Ignore Market Forecasts". These principles guide practical investment decisions and have been tested across decades of market cycles.
What makes Warren Buffett's approach to margin of safety unique?
Warren Buffett's approach to margin of safety is distinguished by a focus on long-term thinking and fundamental analysis. With 3 specific principles in this area, Warren Buffett provides a comprehensive framework that investors at any level can study and apply to improve their decision-making.
