Saturday, December 06, 2025 | 02:15 PM ISTहिंदी में पढें
Business Standard
Notification Icon
userprofile IconSearch

Tipping Point: What is margin of safety?

By investing in stocks that offer margin of safety, investors try to increase chances of returns

Image
premium

Business Standard
A concept wherein an investor only buys a stock when its current market price is below its intrinsic value. These investors believe a stock has a certain price that is right when it is neither over- nor under-valued.
 
By investing only in stocks that offer a margin of safety, investors try to increase their chances of earning decent returns.
 
How would you know whether a stock offers a margin of safety? 
 
Some investors use the discounted cash flow approach to calculate intrinsic value of a stock, and then compare it with the current price. Others make use