A market panic can drive down the prices of all companies (great, good, and not-so-good), effectively widening the margin of safety for a whole portfolio. Market panics may mean across-the-board price volatility, and this often presents opportunities to buy stocks where discounts have increased significantly (higher margins of safety) and fund these purchases by selling those whose margins of safety have not moved as much. As a disciplined value manager, Brandes has researched the underlying value of each holding (taking into account any changes in those values that may be due to whatever caused the market panic), and the goal in these situations is to maximize the margin of safety across the portfolio. To an intelligent investor, a market panic need not be a source of fear, but an opportunity.

Source: The Intelligent Investor: A Book of Practical Counsel—Revised Edition, Benjamin Graham. Updated with New Commentary by Jason Zweig (HarperCollins, 1973, 2003). The margin of safety for any security is the discount of its market price to its estimated intrinsic value.