Margin of Safety
Core Principle of Value Investing
Margin of Safety, proposed by Benjamin Graham, refers to the gap between current stock price and intrinsic value. A larger margin means lower risk and higher potential returns.
(内在价值 - 当前价格) / 内在价值 × 100Sufficient margin of safety provides good risk buffer. This is the ideal buying range recommended by Graham. Consider buying when price is 20%-40% below intrinsic value.
Graham's Recommendation
Graham recommended that investors only buy when the price is significantly below intrinsic value, typically requiring at least 20%-30% margin of safety. The larger the margin, the more protection it provides against valuation errors or market volatility.
Important Note
Margin of Safety calculation is based on estimates of intrinsic value, which itself is uncertain. Different valuation methods may yield different results. Margin of Safety is only a reference indicator. Investment decisions should consider company fundamentals, industry environment, and personal risk tolerance. This tool is for reference only.