The Investing for Beginners Podcast - Your Path to Financial Freedom cover image

IFB261: Mr Market and Margin of Safety: Our Two Favorite Mental Models

The Investing for Beginners Podcast - Your Path to Financial Freedom

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Is There a Margin of Safety?

The only thing that we ever know for sure when we're trying to value something is the price, everything else is an estimate. The idea of what's Netflix really worth? Is it worth 150 billion or is it worth 100 billion? It can be fluid and it can change over time and it's very hard to estimate. What you try to do is buy it at a price that is so cheap compared to what you think it's worth that you're going to win even if you were off by 10, 20, 30 billion dollars.

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