Pulling It All together

The best foundation for a successful investment, or a successful investment career, is value.

You must have a good idea of what the thing you’re considering buying is worth.

To achieve superior investment results, your insight into value has to be superior.

Only a strong sense of value will give you the discipline needed to take profits on a highly appreciated asset that everyone thinks will rise non-stop. Or the guts to hold and average down in a crisis even as prices go lower every day.

The relationship between price and value holds the ultimate key to investment success.

Buying below value is the most dependable route to profit.

What causes an asset to sell below its value?

Primarily because perception understates reality. It takes keen insight to detect cheapness. The goal is to find good buys, not good assets. Buying when the price is below value is a key element in limiting risk.

When other investors are unworried, we should be cautious. When investors panic, we should turn aggressive.

Buying based on strong value, low price relative to value, and depressed general psychology is likely to provide the best results. Even then, things can go against us for a long time before turning as we think they should.

Finally, the author advises that to achieve superior investment results, your insight into value has to be superior. Thus you must learn things others don't, see things differently or do a better job of analyzing them—ideally, all three.