Margin of Safety is written by Seth Klarman, a superinvestor who found Baupost Group, which achieved investment returns of over 20% annually since 1983. The book is now out of print and only available from the library or resellers on Amazon or Ebay for $1000+.
The book is divided in three sections: Where Most Investors Stumble, A Value-Investment Philosophy, and The Value-Investment Process.
In the first section, Klarman distinguished between investors and speculators and why Wall Street cannot help investors to achieve better results. In “A Value-Investment Philosophy”, Klarman wrote about the importance of margin of safety, avoiding losses and the advantage of selecting securities using bottom up analysis. In the last section, Klarman wrote about where investors can find attractive stock ideas.
This book is not a book where investors can find a secret formula to achieve investment success. It is more of a book about the philosophy of investing. Klarman only spent around 50 pages on the value-investment process, whereas the bulk of the book is emphasis on how investors should approach investing and the mindset required to be a successful investor. Klarman also listed real world examples from time to time to illustrate how the philosophies can be applied. By approaching investing with the philosophies Klarman described, investors would become more sophisticated and invest with minimal risk. I highly recommend anyone to read the book to learn about principles of value investing. It will change the way you think about investing forever.
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