Margin of safety: what it is and how to read it

What it is

A discount to the intrinsic value that protects you from mistakes in your assumptions. Buying with a 30% margin means paying 70% of the estimated value.

How to read it

The margin of safety is only as good as the fair-price assumptions. Try more cautious assumptions and see whether any margin is left; if not, the price already counts on a lot.

Educational information; not a recommendation to buy or sell.