#2 Investing 101: How To Think About Fair Value?

If I were to pick only two central concepts in investing, they would be fair value and margin of safety. Understanding fair value will help you avoid permanent loss of capital.

I have thought about fair value since I started investing when I was in law school.

All my life, I haven’t seen one sentence that reflects the essence of fair value better than this:

“It’s not worth it.”

This was the subject of the sentence:

It was autumn 2022 and iPhone 14 had just been launched. I was talking to a friend and we both were using iPhone 11.

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