Easily calculate the Margin of Safety (MOS) for your investments. This essential value investing tool, inspired by Benjamin Graham, helps you identify undervalued stocks by comparing their intrinsic value to the current market price, providing a crucial buffer against market volatility and potential losses. Make smarter, safer investment decisions today.
Formula:
Margin of Safety Formula
The Margin of Safety (MOS) is a core principle in value investing, popularized by Benjamin Graham. It represents the difference between a stock's estimated intrinsic value and its current market price, often expressed as a percentage. A higher margin of safety indicates a more attractive investment opportunity with reduced risk.
Formula:
Margin of Safety (%) = ((Intrinsic Value - Current Market Price) / Intrinsic Value) × 100
Where:
- Intrinsic Value: The true, underlying worth of the asset, estimated through thorough fundamental analysis and valuation methods.
- Current Market Price: The price at which the asset (e.g., a stock) is currently trading on the market.