Dorsey's rule about the margin of safety changed how I view stock prices. I used to buy a stock just because its P/E ratio looked low, often ignoring whether the company was actually healthy or if it was just failing for a reason. Reading this book, I learned that a low price doesn't automatically mean a good investment. For instance, I realized that buying a struggling retailer at a cheap price was actually a trap, not a bargain, because the business model itself was broken. Now, I always calculate the intrinsic value first and only buy if the market price is significantly lower than that calculated value. This approach has made me much more patient and disciplined, preventing me from chasing hot tips or getting scared during market dips. It feels like having a clear checklist instead of flying blind in the stormy market. The examples about avoiding the low P/E trap were especially helpful for my recent investment decisions.
