Preview. Written from general knowledge to guide your reading. It's replaced by full study notes once you record this chapter.
What to listen for
- Margin of safety, the central concept: buy at a price far enough below value that errors and bad luck don't cause losses.
- For bonds and stocks alike, the margin comes from earning power well above what's required, or from price well below value.
- Graham ends with 'investment is most intelligent when it is most businesslike'.
- Rule #1 link: this is where the 50% MOS comes from. Town applies it to Sticker Price, Graham more to assets and earnings power.
Record this chapter
Read it (and Zweig's commentary) aloud, or record your own takeaways afterwards. Then upload the file as ch20.m4a (or ch20-part2.m4a, ch20-commentary.m4a, ch20.txt) to your private ruleone-library repo.