The three most important words in investing

Margin of safety by Seth Klarman is a book I've just stumbled across. I've watched videos and have heard alot about what he has to say but i couldn't put a name to the face. Fortunately, i have now. I was skimming through the book and found his definition of how to distinguish between speculation and investing.

"Mark Twain said that there are two times in a man's life when he should not speculate: when he can't afford it and when he can. Because this is so, understanding the difference between investment and speculation is the first step in achieving investment success. To investors stocks represent fractional ownership of underlying businesses and bonds are loans to those businesses. Investors make buy and sell decisions on the basis of the current prices of securities compared with the perceived values of those securities. They transact when they think they know something that others don't know, don't care about, or prefer to ignore. They buy securities that appear to offer attractive return for the risk incurred and sell when the return no longer justifies the risk. Investors believe that over the long run security prices tend to reflect fundamental developments involving the underlying businesses"

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If you read some of my posts i would like to think we're that on the same page hahah.