The investor's concept of a margin of safety rests upon a simple and definite arithmetical reasoning from statistical data.
- There is no guarantee that the fundamental quantitative approach will be successful in the future, but no reason for pessimism.
- "To have a true investment there must be present a true margin of safety."
"It is our argument that a sufficiently low price can turn a security of mediocre quality into a sound investment opportunity--provided
- that the buyer is informed and experienced and
- that he practices adequate diversification.
For if the price is low enough to create a substantial margin of safety, the security thereby meets our criterion of investment.