The margin of safety is a concept that has been popularized by various value investors, among them Warren Buffet and Seth Klarman, which is centered upon reviewing investments from a risk averse perspective. While many investors tend to review their investments from the perspective of growth potential, future market potential or various macro-centered models, these investors seek to find characteristics in the investment that acts as protection should their valuation be flawed, or future expectations not materialize. The earlier examples tended to be centered on assets that the company held that could be liquidated in order to ensure that the loss they had to take was minimal.
As time went on, investors such as Buffet changed their focus to alternative margins of safety, such as company reputations, market positions, barriers to entry and various other less tangible elements. For instance, the major margin of safety in the Coca Cola Company is the market position and brand recognition that the company has spent decades building since its inception. This concept of the margin of safety is very applicable in the sexual market place, and one of the major arguments in this post deals with how women are naturally wired to seek margins of safety in their market transactions. Continue reading