In my 2020 Investor letter, I discussed the concept of “Margin of Safety” i.e., paying less for a security than it is worth, and its implications for investing. This memo is intended as a follow-up to that discussion. It is divided into seven parts:

Part 1: Why the importance of striving for an accurate view of the future is not obvious to older value investors.

Part 2: Why experience is sometimes a disadvantage.

Part 3: Why the opportunity set is different today and what this means for investing.

Part 4: Why the goal is to be more accurate, not accurate, when forecasting the future.

Part 5: Why skewness matters.

Part 6: Why skewness does not obviate the need to calculate a company's intrinsic value.

Part 7: What Nicholas Taleb misses.