Hi,
For Graham & Dodd the Margin of Safety is the difference between the intrinsic value (fundamental value justified by facts) and the market value. Intrinsic and market values are equal only through coincidence. G&D assumed that the appropriate margin of safety for investments is 30-50%. Intrinsic value is whichever is greater of Net Adjusted Asset Value and Earnings Power Value. Another way of viewing intrinsic value is Net Adjusted Asset Value plus the Franchise Value.
Hi,
For Graham & Dodd the Margin of Safety is the difference between the intrinsic value (fundamental value justified by facts) and the market value. Intrinsic and market values are equal only through coincidence. G&D assumed that the appropriate margin of safety for investments is 30-50%. Intrinsic value is whichever is greater of Net Adjusted Asset Value and Earnings Power Value. Another way of viewing intrinsic value is Net Adjusted Asset Value plus the Franchise Value.