Margin of Safety: The One Rule You Cannot Break
Margin of safety is the single most important concept in investing, and most people ignore it completely. They see a stock going up, they read a headline about record revenue, and they buy at whatever price the market is offering. Then they wonder why their portfolio looks like a crime scene six months later. The idea is brutally simple: never pay full price for anything. Buy assets for significantly less than they are worth, and you give yourself a cushion against being wrong. Because you will be wrong. The question is whether being wrong destroys you or just mildly inconveniences you.