There is a close logical connection between the concept of a safety margin and the principle of diversification.

The intelligent investor should recognize that market panics can create great prices for good companies and good prices for great companies.

The intelligent investor shouldn't ignore Mr. Market entirely. Instead, you should do business with him- but only to the extent that it serves your interests.

In an ideal world, the intelligent investor would hold stocks only when they are cheap and sell them when they become overpriced, then duck into the bunker of bonds and cash until stocks again become cheap enough to buy.

Real investment risk is measured not by the percent that a stock may decline in price in relation to the general market in a given period, but by the danger of a loss of quality and earnings power through economic changes or deterioration in management.

The distinction between investment and speculation in common stocks has always been a useful one and its disappearance is cause for concern.

It should be remembered that a decline of 50% fully offsets a preceding advance of 100%.