tag:blogger.com,1999:blog-28086856.post114843881313378178..comments2024-03-20T01:42:13.273+08:00Comments on Eight percent per annum: Value investing in Singapore stocks: Margin of SafetyJayhttp://www.blogger.com/profile/03292158817395898619noreply@blogger.comBlogger3125tag:blogger.com,1999:blog-28086856.post-41376289350274066972008-07-06T16:31:00.000+08:002008-07-06T16:31:00.000+08:00Heyy, just some trivia regarding the concept of ma...Heyy, just some trivia regarding the concept of margin of safety. <BR/><BR/>Although Warren Buffett is often associated with this term, its true origin is from the Sage of Omaha's intellectual predecessor, Benjamin Graham, who first co-wrote about it in "Security Analysis", and then emphasised it in his concluding chapter in "The Intelligent Investor".<BR/><BR/>For Benjamin Graham, margin of safety usually meant a low PBR and PER for stocks, and a low Net debt-to-equity for bonds.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-28086856.post-1163781786884900962006-11-18T00:43:00.000+08:002006-11-18T00:43:00.000+08:00I tend to see intrinsic value as the moving target...I tend to see intrinsic value as the moving target and margin of safety should be say 40-50% of that. Say if you calculate that the intrinsic value of the stock is $100, then you should buy it only if it is trading at $60 today.<BR/><BR/>So if I am wrong and the intrinsic value is actually only $50. Theoretically, I will only lose $10.Jayhttps://www.blogger.com/profile/03292158817395898619noreply@blogger.comtag:blogger.com,1999:blog-28086856.post-1163729491065755332006-11-17T10:11:00.000+08:002006-11-17T10:11:00.000+08:00Assuming that we can work out the intrinsic value ...Assuming that we can work out the intrinsic value correctly. We still will not be able to forecast with certainity future cost (eg your eg about gold declining by 10% overnight). So wouldn't the Margin of safety a moving target? Is there any industry benchmark? for various sector? Is this a `feeling' thing again?Anonymousnoreply@blogger.com