--- title: "Meaning & Key Takeaway of: Protect the downside. Worry about the…" description: "\"Protect the downside. Worry about the margin of safety.\" — Peter Cundill" image: "https://sms4smile.com/quotes/i/487/peter-cundill-18943_insightful_protect-the-downside-worry-about-the-mar_3072385.jpg" --- # Protect the downside. Worry about the margin of safety. ![“Protect the downside. Worry about the margin of safety.” quote by Peter Cundill](https://sms4smile.com/quotes/i/487/peter-cundill-18943_insightful_protect-the-downside-worry-about-the-mar_3072385.jpg) [Download](https://sms4smile.com/quotes/i/487/peter-cundill-18943_insightful_protect-the-downside-worry-about-the-mar_3072385.jpg) [Open image](https://sms4smile.com/quotes/i/487/peter-cundill-18943_insightful_protect-the-downside-worry-about-the-mar_3072385.jpg) > “Protect the downside. Worry about the margin of safety.” [Peter Cundill](https://sms4smile.com/quotes/author/peter-cundill/) ## About This Quote This interpretation was drafted with AI assistance. It is one reading of the quote, not the author's own explanation. Focus on limiting losses and ensuring a buffer before taking risks. **In simple terms:** Guard against loss, keep a safety margin. Key Takeaway Prioritize downside protection. Themes risk management investment conservatism Mood cautious analytical Type financial advisory When to use this quote - stock selection - portfolio construction - financial planning - risk assessment Key Concepts margin of safety risk aversion capital preservation Questions to Reflect On - How do you balance safety with growth? - When is a safety margin insufficient? A Different Perspective May limit upside potential if overly cautious. ★ ★ ★ ★ ★ No ratings yet [Downside Worry](https://sms4smile.com/quotes/about/downside-worry-5203719/) [Insightful](https://sms4smile.com/quotes/about/insightful/) [Margin Safety](https://sms4smile.com/quotes/about/margin-safety-440802/) [Margins](https://sms4smile.com/quotes/about/margins/) [Protect](https://sms4smile.com/quotes/about/protect/) [Protect Downside](https://sms4smile.com/quotes/about/protect-downside-270932/) [Safety](https://sms4smile.com/quotes/about/safety/) [Values](https://sms4smile.com/quotes/about/values/) [Worry](https://sms4smile.com/quotes/about/worry/) [Worry Margin](https://sms4smile.com/quotes/about/worry-margin-5203720/) ## Related quotes > [One of the dangers about net-net investing is that if you buy a net-net that begins to lose money your net-net goes down and…](https://sms4smile.com/quotes/peter-cundill/one-of-the-dangers-about-net-net-investing-is-that-if-you-buy-a-net/) [Peter Cundill](https://sms4smile.com/quotes/author/peter-cundill/) > [The difference between the price we pay for a stock and its liquidation value gives us a margin of safety. This kind of investing…](https://sms4smile.com/quotes/peter-cundill/the-difference-between-the-price-we-pay-for-a-stock-and-its/) [Peter Cundill](https://sms4smile.com/quotes/author/peter-cundill/) > [We always look at the margin of safety in the balance sheet and then worry about the business.](https://sms4smile.com/quotes/peter-cundill/we-always-look-at-the-margin-of-safety-in-the-balance-sheet-and-then/) [Peter Cundill](https://sms4smile.com/quotes/author/peter-cundill/) > [To have a true investment, there must be a true margin of safety. And a true margin of safety is one that can be…](https://sms4smile.com/quotes/benjamin-graham/to-have-a-true-investment-there-must-be-a-true-margin-of-safety-and-a/) [Benjamin Graham](https://sms4smile.com/quotes/author/benjamin-graham/) > [As a matter of fact I trade in accordance to my means and always leave myself an ample margin of safety.](https://sms4smile.com/quotes/edwin-lefevre/as-a-matter-of-fact-i-trade-in-accordance-to-my-means-and-always/) [Edwin Lefevre](https://sms4smile.com/quotes/author/edwin-lefevre/) > [If you understood a business perfectly and the future of the business, you need very little in the way of a margin of safety.](https://sms4smile.com/quotes/warren-buffett/if-you-understood-a-business-perfectly-and-the-future-of-the-business-2/) [Warren Buffett](https://sms4smile.com/quotes/author/warren-buffett/) > [Proper accounting is like engineering. You need a margin of safety. Thank God we don't design bridges and airplanes the way we do accounting.](https://sms4smile.com/quotes/charlie-munger/proper-accounting-is-like-engineering-you-need-a-margin-of-safety/) [Charlie Munger](https://sms4smile.com/quotes/author/charlie-munger/) > [In engineering, people have a big margin of safety. But in the financial world, people don't give a damn about safety. They let it…](https://sms4smile.com/quotes/charlie-munger/in-engineering-people-have-a-big-margin-of-safety-but-in-the/) [Charlie Munger](https://sms4smile.com/quotes/author/charlie-munger/) > [The margin of safety is always dependent on the price paid. It will be large at one price, small at some higher price, nonexistent…](https://sms4smile.com/quotes/benjamin-graham/the-margin-of-safety-is-always-dependent-on-the-price-paid-it-will-be/) [Benjamin Graham](https://sms4smile.com/quotes/author/benjamin-graham/) > [ 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… ](https://sms4smile.com/quotes/warren-buffett/there-are-three-important-principles-to-graham-s-approach-the-first/) [Warren Buffett](https://sms4smile.com/quotes/author/warren-buffett/) > [The three most important words in investing...Margin of Safety.](https://sms4smile.com/quotes/warren-buffett/the-three-most-important-words-in-investing-margin-of-safety/) [Warren Buffett](https://sms4smile.com/quotes/author/warren-buffett/) > [If you understood a business perfectly and the future of the business, you would need very little in the way of a margin of…](https://sms4smile.com/quotes/warren-buffett/if-you-understood-a-business-perfectly-and-the-future-of-the-business/) [Warren Buffett](https://sms4smile.com/quotes/author/warren-buffett/) > [The function of the margin of safety is, in essence, that of rendering unnecessary an accurate estimate of the future.](https://sms4smile.com/quotes/benjamin-graham/the-function-of-the-margin-of-safety-is-in-essence-that-of-rendering/) [Benjamin Graham](https://sms4smile.com/quotes/author/benjamin-graham/) > [No matter how careful you are, the one risk no investor can ever eliminate is the risk of being wrong. Only by insisting on…](https://sms4smile.com/quotes/benjamin-graham/no-matter-how-careful-you-are-the-one-risk-no-investor-can-ever/) [Benjamin Graham](https://sms4smile.com/quotes/author/benjamin-graham/) > [Edge also implies what Ben Graham…called a margin of safety. You have a margin of safety when you buy an asset at a price…](https://sms4smile.com/quotes/michael-mauboussin/edge-also-implies-what-ben-graham-called-a-margin-of-safety-you-have/) [Michael Mauboussin](https://sms4smile.com/quotes/author/michael-mauboussin/) ## More by Peter Cundill > [The company must be profitable. Preferably it will have increased its earnings for the past five years and there will have been no deficits…](https://sms4smile.com/quotes/peter-cundill/the-company-must-be-profitable-preferably-it-will-have-increased-its/) [Peter Cundill](https://sms4smile.com/quotes/author/peter-cundill/) > [The difference between the price we pay for a stock and its liquidation value gives us a margin of safety. This kind of investing…](https://sms4smile.com/quotes/peter-cundill/the-difference-between-the-price-we-pay-for-a-stock-and-its/) [Peter Cundill](https://sms4smile.com/quotes/author/peter-cundill/) > [The price must be less than one half of the former high and preferably at or near its all time low.](https://sms4smile.com/quotes/peter-cundill/the-price-must-be-less-than-one-half-of-the-former-high-and/) [Peter Cundill](https://sms4smile.com/quotes/author/peter-cundill/) > [Try to pick a fund manager who has a well-defined strategy, has been through these things before, and go invest and stay with him.](https://sms4smile.com/quotes/peter-cundill/try-to-pick-a-fund-manager-who-has-a-well-defined-strategy-has-been/) [Peter Cundill](https://sms4smile.com/quotes/author/peter-cundill/) > [Why will someone sell you a dollar for 50 cents? Because in the short run, people are irrational on both the optimistic and pessimistic side.](https://sms4smile.com/quotes/peter-cundill/why-will-someone-sell-you-a-dollar-for-50-cents-because-in-the-short/) [Peter Cundill](https://sms4smile.com/quotes/author/peter-cundill/) > [The most important attribute for success in value investing is patience, patience, and more patience. The majority of investors do not possess this characteristic.](https://sms4smile.com/quotes/peter-cundill/the-most-important-attribute-for-success-in-value-investing-is/) [Peter Cundill](https://sms4smile.com/quotes/author/peter-cundill/) > [You find bargains among the unpopular things, the things that everybody hates. The key is that you must have patience.](https://sms4smile.com/quotes/peter-cundill/you-find-bargains-among-the-unpopular-things-the-things-that/) [Peter Cundill](https://sms4smile.com/quotes/author/peter-cundill/) > [When a stock doubles, sell half - then what you have is a free position. Then it becomes more of an art form. When…](https://sms4smile.com/quotes/peter-cundill/when-a-stock-doubles-sell-half-then-what-you-have-is-a-free-position/) [Peter Cundill](https://sms4smile.com/quotes/author/peter-cundill/) > [Just as many smart people fail in the investment business as stupid ones. Intellectually active people are particularly attracted to elegant concepts, which can…](https://sms4smile.com/quotes/peter-cundill/just-as-many-smart-people-fail-in-the-investment-business-as-stupid/) [Peter Cundill](https://sms4smile.com/quotes/author/peter-cundill/) > [I suspect that my thinking is an eclectic mix, not pure net-net because I couldn’t do it anyway so you have to have a…](https://sms4smile.com/quotes/peter-cundill/i-suspect-that-my-thinking-is-an-eclectic-mix-not-pure-net-net/) [Peter Cundill](https://sms4smile.com/quotes/author/peter-cundill/) > [The share price must be less than book value. Preferably it will be less than net working capital less long term debt.](https://sms4smile.com/quotes/peter-cundill/the-share-price-must-be-less-than-book-value-preferably-it-will-be/) [Peter Cundill](https://sms4smile.com/quotes/author/peter-cundill/) > [The company must be paying dividends. Preferably the dividend will have been increasing and have been paid for some time.](https://sms4smile.com/quotes/peter-cundill/the-company-must-be-paying-dividends-preferably-the-dividend-will/) [Peter Cundill](https://sms4smile.com/quotes/author/peter-cundill/) > [Curiosity is the engine of civilisation](https://sms4smile.com/quotes/peter-cundill/curiosity-is-the-engine-of-civilisation/) [Peter Cundill](https://sms4smile.com/quotes/author/peter-cundill/) > [The price earning multiple must be less than ten or the inverse of the long term corporate bond rate, whichever is the less.](https://sms4smile.com/quotes/peter-cundill/the-price-earning-multiple-must-be-less-than-ten-or-the-inverse-of/) [Peter Cundill](https://sms4smile.com/quotes/author/peter-cundill/) > [I think that intelligent forecasting (company revenues, earnings, etc.) should not seek to predict what will in fact happen in the future. Its purpose…](https://sms4smile.com/quotes/peter-cundill/i-think-that-intelligent-forecasting-company-revenues-earnings-etc/) [Peter Cundill](https://sms4smile.com/quotes/author/peter-cundill/) [Explore all 33 Peter Cundill quotes ](https://sms4smile.com/quotes/author/peter-cundill/) ## More Insightful quotes > [A friend is one with whom you are comfortable, to whom you are loyal, through whom you are blessed, and for whom you are…](https://sms4smile.com/quotes/william-arthur-ward/a-friend-is-one-with-whom-you-are-comfortable-to-whom-you-are-loyal/) [William Arthur Ward](https://sms4smile.com/quotes/author/william-arthur-ward/) > [I love writers who are insightful enough to be cynical but choose not to be.](https://sms4smile.com/quotes/brian-d-mclaren/i-love-writers-who-are-insightful-enough-to-be-cynical-but-choose-not/) [Brian D. 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