The Daily Buffett

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The Price of Value

August 23rd

Price is what you pay. Value is what you get.

Warren Buffett

In the world of investing, it's easy to be seduced by the allure of immediate rewards. There's a tendency to equate the cost of an asset with its inherent worth. But one must discern the difference between price and value.

Price refers to the immediate cost of a stock, business, or investment. It's the financial outlay one makes in the hope of seeing a return. Yet price can be deceptive, a high-priced asset may not yield the expected returns, making it a low-value investment.

Value though, refers to what one ultimately gains from the investment. It's the dividends, growth, and returns one sees over time. An investment might come at a low cost but could potentially yield substantial returns in the future. This is the real value of an investment, not the price tag attached to it.

So, let's shift our focus from price to value. Let's not let the shiny surface of immediate gratification blind us to the potential long-term gains lying beneath. The quiet, consistent returns, often undervalued, are the true measure of an investment's worth. Because in investing, and in life, true value often comes not from the immediate cost but from the consistent returns one gains over time.

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Copyright © 2023 by Scott Sansovich