The terms used to describe value investing don't require any accounting or finance background.
Warren Buffett's analogy using the maximum allowable weight of a bridge is used to illustrate how this margin of safety works:
The margin of safety (buying at a discount) is therefore of utmost importance.
Value investors gain an advantage when many:
- do not buy with a margin of safety,
- remain fully invested at all times, and
- trade stocks like pieces of paper with little regard to the underlying asset values.