| Title | Margin of Safety |
| Author | Seth Klarman |
| Publisher | HarperCollins |
| Type | Securities, Investment |
| Year of Publication | 1991 |
| Language | English |
| File Format | |
| Number of Pages | 249 |
| Rating | Click to rate this post! [Total: 1 Average: 5] |
Margin of Safety: Risk-averse Value Investing Strategies for the Thoughtful Investor is a 1991 book written by American investor Seth Klarman, manager of the Baupost Group hedge fund. The book discusses Klarman’s views on value investing, moderation, valuation, and portfolio management, among other topics. Klarman builds on the earlier investment book The Intelligent Investor, chapter 20, titled “margin of safety,” a concept coined in the 1940s by authors Benjamin Graham and David Dodd.
Margin of Safety Summary
Too often, investors are drawn to the prospect of instant millions and fall prey to Wall Street’s many fads. The myriad approaches they take offer little or no real chance of long-term success and invariably run the risk of considerable economic loss: they resemble speculation or head-to-head play, not a consistent investment program. But value investing, the strategy of investing in stock trading at an appreciable discount to the underlying security has a long history, has a long history of delivering excellent investment results with limited downside risk.
Taking its title from Benjamin Graham’s admonished repetition of always investing with a safety margin, Klarman’s “Safety Margin” explains the philosophy of value investing, and perhaps most importantly, the logic behind it, demonstrating by what succeeds while other approaches fail. The plan offered by Klarman, if carefully followed, offers the investor a great chance of investment success with limited risk.
Margin of Safety Review
The ‘Safety Margin’ shows you not only how to invest, but also how to think deeply about the investment, understand the reason behind the rules to appreciate why they work when they work and why they don’t when they don’t.
About The Author of The Book Seth Klarman
Seth Klarman is an American hedge-fund manager and a billionaire who founded the Baupost Group, a Boston-based private investment partnership, and the author of a book on value investing titled Margin of Safety: Risk-Averse Value Investing Strategies for the Thoughtful Investor. Klarman is a graduate of Cornell University and Harvard Business School where he was a Baker Scholar.
Klarman grew up in a Jewish family in Baltimore, where his father was a public health economist at Johns Hopkins University and his mother taught high school English.
Margin of Safety PDF
Reception and impact
Despite initial failure, over time the book has achieved “cult” status among the value investing community and has been revered as a “bible” of sorts. This has caused physical copies of the book to be worth between $500 and $2,500 each. The high price of the book has led to piracy of the book.
The book has appeared on several recommended reading lists in the investment press.
