Connect With Us

Linked In - Global View Investment Advisor Blog - Global View Facebook Investment Advisors - Global View Twitter - Global View RSS Blog Feed - Global View Investment Advisors Google Plus - Global View

Margin of Safety Commentary

Currently Browsing Margin of Safety Commentary :

An Overview:
A Margin of Safety arises when the price of the security falls substantially below a conservatively derivedintrinsic value. The intrinsic value of a security is the value an outside investor would pay for it based on future income the security will generate (from distributions and capital gains) generally over a reasonable time period of 3-5 years. A margin of safety can be found in any security. For stocks, the most important question is whether the company will continue to function as a going concern in a potentially difficult competitive and economic environment and whether its enterprise value will be permanently impaired. The same news events can occur that create a Margin of Safety (or discount to intrinsic value) for a bond or for a stock.

In the case of stock invesments, the growth rate of the economy where the company does its primary business
is typically used for its earnings growth rate to determine a conservaively derived intrinsic vlaue. This is where Margin of Safety investing is often confused simply with Value investing, which although correct on one level is insufficient because value is often confused with price.


Elite Manager Closing Funds

The two flagship funds of Global View’s favorite Investment Manager have been soft closed for the past six months, since cumulatively reaching $700 million in assets under management. Soft closing the funds inhibits access from new investors, and allows current shareholders to add to their positions. This permitted Global View…

Read More

Party Until the Punch Bowl is Taken Away

Party Until the Punch Bowl is Taken Away

While preparing for our latest newsletter we came across some new information we feel compelled to share with clients.  As we discussed in an earlier newsletter, this is not the first time the Federal Government has taken over financial markets and the economy.  They did it during the Great Depression…

Read More

Blind Faith

“Incompetence is the disease of idiots.  Overconfidence is the mistake of experts … Incompetence irritates me.  Overconfidence terrifies me.”  Malcolm Gladwell Steve Romick’s latest message suggests that continued easy monetary policy will not end well.  “Despite Mr. Bernanke’s poor batting average (at predicting the future), his confidence appears unshaken.”  We…

Read More

12