Clipper Fund's James Gipson discussed housing bubble and margin of safety in his most recent shareholder letter: “THERE IS no easier way to get rich than rolling out of bed in the morning and knowing that the floor you stand on is worth more than it was the night before. The longer you sleep, the richer you are. Homes are the darlings of the decade, at least the first half of it. Every business magazine warns against the speculative housing bubble, particularly when financed by creative mortgages with low documentation and even less down payment… The warnings probably are reasonable in the long run, but bubbles are notoriously hard to predict as to when and how they will pop. Because investing (and life in general) entails future risks that are both unknown and unknowable, a reasonable investor looks for a margin of safety before committing his capital. Currently, the prices of most long-term assets (e.g., stocks, bonds and, of course, real estate) do not offer much margin of safety.” He likes Wal-Mart.