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.
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 would like to learn how we calculate the MOS, please visit the Calculations section within our support site. The math behind Tykr is open source. No “hidden secrets”.