The higher the MOS (Margin of Safety) the higher potential returns you can make.
MOS is the Share Price discount off the Fair Value.
Within Tykr, we like to see a MOS of 50% or more.
For example…
- If the Share Price is $100 and the Fair Value is $200, that means the MOS is 50%. ($100 is 50% off $200).
- If the Share Price is $100 and the Fair Value is $400, that means the MOS is 75%. ($100 is 75% off $400).
Think of it like buying groceries. When you go shopping for food, do you want to pay full price or do you want to find a deal? Personally, I never like to pay full price on groceries and I never like to pay full price on stocks!
If you’re interested, visit our calculations section to learn how the MOS is calculated. The math behind Tykr is open source. No “hidden secrets”.