“A wise man proportions his belief to the evidence”
– David Hume
What is the difference between Value and Price?
To understand and answer this question is to move from being a speculator or gambler, to being an investor.
Financial history gives us many examples of bubbles and foolish asset purchases, from the South Sea to the dot-com bubble. Investors are drawn into bubbles as they see assets climb sometimes to unbelievable levels, and become more inclined to invest, not less. The events of the dot-com bubble act as a tangible example of belief being about basing decisions on what you want to see, without understanding the Value. Value is about basing decisions on the true worth of an asset or idea.
To be an investor one must understand the true Value of an asset. Once this is known an investor then waits until the market provides the opportunity of paying a Price significantly lower than the Value received.
Price is what is paid
Value is what is received
At LWM we aim not to follow the herd but to get to understand a fund or idea, to evaluate its Value, and to invest where Value exceeds Price.
Our service proposition is simple
- Invest your money the way we invest our own
- Think about, understand and explain
- Invest based on Values
- Understand your needs and requirements and construct a plan which matches and meets them