Margin of Safety – Never overpay for any stock

Margin of safety ensures that you would substantially cut down your losses should the market go down and similarly you would give yourself a chance to make huge gains when the stock markets go up.

Predictions can go wrong; the factors based on which the analyses were made might change over time; a product on the development of which the company spent a lot of money during research and development might not materialize and make as much money as envisaged. In all these cases, building adequate margin of safety into the buying price would ensure that the possibility of loss is greatly minimized.

We should always know what is the right price to pay for any stock. The right price to pay can be arrived at using simple formulas. Our product recommends highly profitable companies for buying. It also contains the right price that should be paid for such stocks. Until the stocks reach those prices, you would do well to add them to the watchlist and once it reaches that price, it would be the time to buy.

Our analysis and the rating system ensures that you buy only best companies at attractive prices.

Published by Rajmohan

Rajmohan is an Indian Chartered Accountant with more than 15 years of experience in India Stock Markets.

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