3min chapter

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

CHAPTER

The Value of a Margin of Safety in Investing

The idea of a margin of safety is to find companies that are selling for less than what they're worth. It's an idea around the opportunity cost lost if you sit in a company that trades sideways or never really makes. And it helps ensure that even if the company doesn't do as well, you can still do okay. Sometimes doing okay is better than not doing well at all or losing money.

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