The 12 Days of Investing

– DAY 1 –

Margin of Safety

The three most important words in investing.

Benjamin Graham, believed by many to be the father of value investing, wrote in his book The Intelligent Investor, “Confronted with [the] challenge to distill the secret of sound investment into three words, we venture the motto, MARGIN OF SAFETY”.

Simply put, Graham’s margin of safety is the difference between a company’s stock price and its intrinsic value. Contrary to the common view that higher returns can only be achieved by taking greater risks, value investing is based upon the notion that increased returns are associated with a greater “margin of safety”, or lower risk. Read more…

Blog Post

Searching the Skies…

The first thing we look for in a potential closet the discount scenario is that the company is trading at a substantial discount to a conservative estimate of intrinsic value. This deep discount to value provides a margin of safety for the imprecision of estimates and any unexpected issues which may arise.

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Our Company

The Pender Edge

The Pender Investment Team is fully integrated and shares ideas across the capital structure, geographies and cap size … [with an] emphasis on deep fundamental analysis and building in a “margin of safety” …

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Book Review

The Undoing Project

Interestingly, one of the most significant biases that can impair our decision making is confidence bias…the more information people have about an investment, the more confident they become… The tendency here is to decrease your “margin of safety”. 

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