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

— Rick Rule

… The problem most investors have is they rely on price information and conflate it with value.

Investors pay most attention to the price of an asset because it’s easy information to find. You can get it online… from the newspaper… or from your broker. Value is different. It’s hard to get. You have to work for it.

Being a successful investor involves exploiting the arbitrage between price and value. That is to say it involves buying things at a price substantially below either an investment’s value… or the value you think it’s likely to attain over time.

This kind of arbitrage between price and value is needed on the sell side, too. In addition to having the courage to buy low, a successful investor needs the wisdom to sell high. One of the things that happens when the price of an investment you’ve made goes up is the self-enforcing tendency to believe your thesis for more than it’s worth.”

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