Certain Quote by Benjamin Graham
“Even with a margin of safety in the investor's favor, an individual security may work out badly. For the margin guarantees only that he has a better chance for profit than for loss - not that loss is impossible. But as the number of such commitments is increased the more certain does it become that the aggregate of the profits will exceed the aggregate of the losses.”
About This Quote
Source Book: The Intelligent Investor, 1949
A safety margin reduces risk but does not eliminate loss; diversification across many investments makes overall profit more likely.
In simple terms: Safety margin helps but doesn't guarantee profit; diversification improves odds.
Key Takeaway
Diversify to increase chances of net gain.
Themes
risk management
investment
diversification
Mood
cautious
analytical
Type
financial
educational
When to use this quote
- stock investing
- retirement planning
- risk assessment
- financial advising
Key Concepts
probability
portfolio theory
Questions to Reflect On
- How many different assets should I hold?
- What level of risk is acceptable for my goals?
A Different Perspective
Even diversified portfolios can suffer large losses in market crashes.
![“There are three important principles to Graham's approach. [The first is to look at stocks as fractional shares of a business, which] gives you an entirely different view than most people who are in the market. [The second principle is the margin-of-safety concept, which] gives you the competitive…” quote by Warren Buffett](https://sms4smile.com/quotes/img-quotes/72f/warren-buffett-183_advantage_there-are-three-important-principles-to_784492.jpg)
