Warren Buffett has often stated that the Intelligent Investor by Benjamin Graham is the best book ever written on investing. The two chapters that Buffett rates most highly are chapter 8, The Investor and Market Fluctuation where Graham came up with the metaphor of the manic-depressive Mr. Market, and chapter 20, "Margin of Safety" as the Central Concept of Investment. The focus for this brief and introductory text is the latter.
Margin of safety as a concept
"Long ago, Ben Graham taught me that "Price is what you pay; value is what you get" / Warren Buffett
Margin of safety is in investment terms often described as the difference between value and...