It's an old expression, and It's one I'm quite fond of for some reason. The basic, long winded meaning would be:

"The event that we we were hoping would not affect us did not, indeed, affect us. Therefore, the threshold by which it did not effect us is no concern; It could be very large or very small, but I don't give a pair of dingoes kidneys how close of a shave it was. It missed us, and the amount of distance it missed us by it really not that important."

The earliest known record of this proverb in literature can be found in William Camden's Remains Concerning Britain (1605):

An ynche in a misse is as good as an ell.

A 1655 quote from Thomas Fuller illustrates the lengthy syntax of the proverb's original structure:

An hairs breadth fixed by a divine finger, shall prove as effectuall a separation from danger as a miles distance.

By the late 18th Century the proverb had been abridged to its current form.

Contrast Half a loaf is better than none.

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