From Graham’s class, Warren took away three main principles: • A stock is the right to own a little piece of a business. A stock is worth a certain fraction of what you would be willing to pay for the whole business. • Use a margin of safety. Investing is built on estimates and uncertainty. A wide margin of safety ensures that the effects of good decisions are not wiped out by errors. The way to advance, above all, is by not retreating. • Mr. Market is your servant, not your master. Graham postulated a moody character called Mr. Market, who offers to buy and sell stocks every day, often at
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