Margin of Safety
by Seth A. Klarman
Klarman's 1991 book on risk-averse value investing: why most investors speculate, the institutional pressures that cause it, and how to buy with a margin of safety in undervalued and distressed securities. Out of print and famously expensive used, it is read for its discipline more than its specific opportunities.
Read it if…
you are a serious value investor and want the discipline from a master.
Skip it if…
you are a beginner; the examples are dated and the price absurd. Borrow it.
Three things you will actually use
- Avoid loss first; returns follow.
- Institutions are forced to speculate; you are not.
- Price paid determines risk.
Do this first
Define your margin of safety in writing before your next purchase.
Our verdict
Discipline from a master.
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