Benjamin Graham (May 8, 1894 – September 21, 1976), an American economist and professional investor, first defined risk as a permanent loss of capital. Considered the first proponent of value investing, his 1934 book, Security Analysis written with David Dodd, is considered the bible for serious investors.
When a company is available on the market at a price which is at a discount to its intrinsic value, a "margin of safety" exists, which makes it suitable for investment
Market values fluctuate above and below a company’s intrinsic value. Purchases above intrinsic value risk experiencing a permanent loss of capital when the valuation eventually reverts to intrinsic, as it always does
Risk is inherent in any investment strategy and cannot be eliminated but can be effectively managed
Our primary goal in the management of risk is to protect the portfolio from permanent impairment