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SHFL entertainment, AŞ Message Board

  • bob_phuckwad bob_phuckwad Mar 1, 2006 4:12 PM Flag

    Motley Fools Say SHFL Hype Co.

    Lesson No. 2: Always buy with a margin of safety.
    Graham was perhaps the first stock analyst to understand this fundamental truth about investing: Price is everything. Indeed, buying shares of a great company means nothing if you overpay. And buying rubbish on the cheap will frequently leave you with only the unpleasant odor of a rotting portfolio.

    Graham details how to buy with a margin of safety, which he calls the "central concept" of investing. Put simply, the "margin of safety" is the difference between the intrinsic value and the price at which a stock trades. For example, a security worth $50 per share but trading at $25 per share enjoys a massive 100% margin of safety. Buying in that situation heavily stacks the odds in favor of the investor.

    Conversely, a stock that trades close to or above its intrinsic value offers almost no margin of safety. And buying without a margin of safety, in Graham's book, is no better than mere speculation. Or worse, gambling. Consider the recent performance of oft-hyped gaming stocks such as Shuffle Master (Nasdaq: SHFL), Gaming Partners (Nasdaq: GPIC), and WPT Enterprises (Nasdaq: WPTE) to see what I mean

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