Fundamental investing is the idea that what money does matters. Money is abstract. It is not a thing. It is a tool. It is a way we communicate with each other. Money can get quite confusing, because there can be a lot of smoke and mirrors.
You can put a price on anything. That is why it is a useful communication tool. Because even if you have completely different worldviews, you have this point of connection that is price. You do not need to understand each other.
Computers are not sentient, but a string of ones and zeros can convey information that can lead to action. The computers do not understand the ones and zeros, but they know what to do.
Price is similar. Price itself literally does not care. It is a tool between two people who (may) care very much. All a price must do, is be a catalyst for exchange.
There is a difference between trading and investing. Trading can be speculative. If a price has a pulse, you can trade it. It doesn't actually matter what is underneath.
Investing does care what the thing is. It is not just about the price. You are not just trying to outperform. Your performance is not relative to other people. With investing it matters that you are creating something of value.
Investing is putting money to work to build value.
No comments:
Post a Comment