An investment operation is one which, upon thorough analysis, promises safety of principal and an adequate return. Operations not meeting these requirements are speculative. 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. The concept of a margin of safety has a close logical connection with the principle of diversification. There is a close logical connection also between the concept of a margin of safety and the principle of diversification. One is correlative with the other. Even with a margin in the investor's favour, 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. That is the simple basis of the insurance-underwriting business. Diversification is an established tenet of conservative investment. By accepting it so universally, investors are really demonstrating their acceptance of the margin-of-safety principle, to which diversification is the companion. In the old legend the wise men finally boiled down the history of mortal affairs into the single phrase, "This too will pass." Confronted with a like challenge to distill the secret of sound investment into three words, we venture the motto: MARGIN OF SAFETY. That is the thread that runs through all the preceding discussion of investment policy. Investment is most intelligent when it is most businesslike. If a person sets out to make profits from security purchases and sales, he is embarking on a business venture of his own, which must be run in accordance with accepted business principles if it is to have a chance of success.
An investment operation is one which, upon thorough analysis, promises safety of principal and an adequate return. Operations not meeting these requirements are speculative. 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. The concept of a margin of safety has a close logical connection with the principle of diversification. There is a close logical connection also between the concept of a margin of safety and the principle of diversification. One is correlative with the other. Even with a margin in the investor's favour, 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. That is the simple basis of the insurance-underwriting business. Diversification is an established tenet of conservative investment. By accepting it so universally, investors are really demonstrating their acceptance of the margin-of-safety principle, to which diversification is the companion. In the old legend the wise men finally boiled down the history of mortal affairs into the single phrase, "This too will pass." Confronted with a like challenge to distill the secret of sound investment into three words, we venture the motto: MARGIN OF SAFETY. That is the thread that runs through all the preceding discussion of investment policy. Investment is most intelligent when it is most businesslike. If a person sets out to make profits from security purchases and sales, he is embarking on a business venture of his own, which must be run in accordance with accepted business principles if it is to have a chance of success.
An investment operation is one which, upon thorough analysis, promises safety of principal and an adequate return. Operations not meeting these requirements are speculative. 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. The concept of a margin of safety has a close logical connection with the principle of diversification. There is a close logical connection also between the concept of a margin of safety and the principle of diversification. One is correlative with the other. Even with a margin in the investor's favour, 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. That is the simple basis of the insurance-underwriting business. Diversification is an established tenet of conservative investment. By accepting it so universally, investors are really demonstrating their acceptance of the margin-of-safety principle, to which diversification is the companion. In the old legend the wise men finally boiled down the history of mortal affairs into the single phrase, "This too will pass." Confronted with a like challenge to distill the secret of sound investment into three words, we venture the motto: MARGIN OF SAFETY. That is the thread that runs through all the preceding discussion of investment policy. Investment is most intelligent when it is most businesslike. If a person sets out to make profits from security purchases and sales, he is embarking on a business venture of his own, which must be run in accordance with accepted business principles if it is to have a chance of success.
An investment operation is one which, upon thorough analysis, promises safety of principal and an adequate return. Operations not meeting these requirements are speculative. 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. The concept of a margin of safety has a close logical connection with the principle of diversification. There is a close logical connection also between the concept of a margin of safety and the principle of diversification. One is correlative with the other. Even with a margin in the investor's favour, 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. That is the simple basis of the insurance-underwriting business. Diversification is an established tenet of conservative investment. By accepting it so universally, investors are really demonstrating their acceptance of the margin-of-safety principle, to which diversification is the companion. In the old legend the wise men finally boiled down the history of mortal affairs into the single phrase, "This too will pass." Confronted with a like challenge to distill the secret of sound investment into three words, we venture the motto: MARGIN OF SAFETY. That is the thread that runs through all the preceding discussion of investment policy. Investment is most intelligent when it is most businesslike. If a person sets out to make profits from security purchases and sales, he is embarking on a business venture of his own, which must be run in accordance with accepted business principles if it is to have a chance of success.
An investment operation is one which, upon thorough analysis, promises safety of principal and an adequate return. Operations not meeting these requirements are speculative. 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. The concept of a margin of safety has a close logical connection with the principle of diversification. There is a close logical connection also between the concept of a margin of safety and the principle of diversification. One is correlative with the other. Even with a margin in the investor's favour, 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. That is the simple basis of the insurance-underwriting business. Diversification is an established tenet of conservative investment. By accepting it so universally, investors are really demonstrating their acceptance of the margin-of-safety principle, to which diversification is the companion. In the old legend the wise men finally boiled down the history of mortal affairs into the single phrase, "This too will pass." Confronted with a like challenge to distill the secret of sound investment into three words, we venture the motto: MARGIN OF SAFETY. That is the thread that runs through all the preceding discussion of investment policy. Investment is most intelligent when it is most businesslike. If a person sets out to make profits from security purchases and sales, he is embarking on a business venture of his own, which must be run in accordance with accepted business principles if it is to have a chance of success.
An investment operation is one which, upon thorough analysis, promises safety of principal and an adequate return. Operations not meeting these requirements are speculative. 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. The concept of a margin of safety has a close logical connection with the principle of diversification. There is a close logical connection also between the concept of a margin of safety and the principle of diversification. One is correlative with the other. Even with a margin in the investor's favour, 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. That is the simple basis of the insurance-underwriting business. Diversification is an established tenet of conservative investment. By accepting it so universally, investors are really demonstrating their acceptance of the margin-of-safety principle, to which diversification is the companion. In the old legend the wise men finally boiled down the history of mortal affairs into the single phrase, "This too will pass." Confronted with a like challenge to distill the secret of sound investment into three words, we venture the motto: MARGIN OF SAFETY. That is the thread that runs through all the preceding discussion of investment policy. Investment is most intelligent when it is most businesslike. If a person sets out to make profits from security purchases and sales, he is embarking on a business venture of his own, which must be run in accordance with accepted business principles if it is to have a chance of success.
An investment operation is one which, upon thorough analysis, promises safety of principal and an adequate return. Operations not meeting these requirements are speculative. 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. The concept of a margin of safety has a close logical connection with the principle of diversification. There is a close logical connection also between the concept of a margin of safety and the principle of diversification. One is correlative with the other. Even with a margin in the investor's favour, 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. That is the simple basis of the insurance-underwriting business. Diversification is an established tenet of conservative investment. By accepting it so universally, investors are really demonstrating their acceptance of the margin-of-safety principle, to which diversification is the companion. In the old legend the wise men finally boiled down the history of mortal affairs into the single phrase, "This too will pass." Confronted with a like challenge to distill the secret of sound investment into three words, we venture the motto: MARGIN OF SAFETY. That is the thread that runs through all the preceding discussion of investment policy. Investment is most intelligent when it is most businesslike. If a person sets out to make profits from security purchases and sales, he is embarking on a business venture of his own, which must be run in accordance with accepted business principles if it is to have a chance of success.
An investment operation is one which, upon thorough analysis, promises safety of principal and an adequate return. Operations not meeting these requirements are speculative. 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. The concept of a margin of safety has a close logical connection with the principle of diversification. There is a close logical connection also between the concept of a margin of safety and the principle of diversification. One is correlative with the other. Even with a margin in the investor's favour, 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. That is the simple basis of the insurance-underwriting business. Diversification is an established tenet of conservative investment. By accepting it so universally, investors are really demonstrating their acceptance of the margin-of-safety principle, to which diversification is the companion. In the old legend the wise men finally boiled down the history of mortal affairs into the single phrase, "This too will pass." Confronted with a like challenge to distill the secret of sound investment into three words, we venture the motto: MARGIN OF SAFETY. That is the thread that runs through all the preceding discussion of investment policy. Investment is most intelligent when it is most businesslike. If a person sets out to make profits from security purchases and sales, he is embarking on a business venture of his own, which must be run in accordance with accepted business principles if it is to have a chance of success.