Here is a good analogy on investing and the concept of margin of safety from Buffett some time back.

If you see that a man is very fat, it makes little difference that you are able to precisely calculate his exact weight to enhance your conclusion. Is he 102kg or 110kg? Does it matter? Similarly in trying to determine the intrinsic value of the company, it doesn’t matter if you get it at $102 or $110. What is more important is where is the price now? If it is $98, it means that you are aiming for 4-12% upside. That’s not a lot of buffer against any calculation error. It means that the stock is not cheap enough. 

Margin of Safety

If the stock is at $70, then we are talking. The margin of safety now opens up to 30%. It takes a few more mistakes for us to be wrong