Skip to main content
padlock icon - secure page this page is secure

The margin of safety principle and corporate strategy

Buy Article:

$41.32 + tax (Refund Policy)

PurposeThis paper seeks to analyze the applicability of the time-tested margin of safety principle from value investing to corporate strategy. Design/methodology/approachThe main source of this paper is the book Margin of Safety, supplementation materials, including a discussion with the book's author, Seth Klarman, were also referenced. FindingsThe paper finds that the margin of safety principle is broadly applicable to corporate strategy in areas such as M&A, hedging, balance sheet management, share buybacks, special dividends, divestments, and cash management. Each of these areas is discussed in the paper and illustrated by way of timely examples as part of the analysis. Research limitations/implicationsFurther research could be conducted into valuation methods in general, including the method practiced by noted value investors. Research could also be conducted into the margin of safety principle and its applications in corporate strategy, corporate finance, strategic risk management, shareholder communications, and operations management. Originality/valueThis is the first paper that the author is aware of that analyzes the applicability of the investment-based margin of safety principle to corporate strategy and strategy-related initiatives.
No Reference information available - sign in for access.
No Citation information available - sign in for access.
No Supplementary Data.
No Article Media
No Metrics

Keywords: Corporate strategy; Investment; Margin of safety; Safety measures; Value added; Value creation

Document Type: Research Article

Publication date: September 6, 2011

More about this publication?
  • Access Key
  • Free content
  • Partial Free content
  • New content
  • Open access content
  • Partial Open access content
  • Subscribed content
  • Partial Subscribed content
  • Free trial content
Cookie Policy
X
Cookie Policy
Ingenta Connect website makes use of cookies so as to keep track of data that you have filled in. I am Happy with this Find out more