Cognitively Yours

  Raja R,  Author "A voiding the losers is an important part of every great investor’s game. Defensive investing with a margin of safety will ensure that your portfolio is prepared for things going wrong" When you plan long-term especially for your retirement or any other long-term need, it is quite hard to predict one’s changing goals and desires as well as the changing environment and landscape. Unknowns are present in life. As Warren Buffett puts it “For a piece of information to be desirable, it has to satisfy two criteria: it has to be important, it has to be knowable”. In many factors entailing great uncertainty, agnosticism is probably wiser than self-delusion, as Howard Marks mentions in his latest memo. Need for Margin of safety Benjamin Graham known for his concept of margin of safety mentions that the purpose of margin of safety is to render the forecast unnecessary. A very simple yet powerful statement. Margin of safety or room for error or redundancy - is the onl...