Thursday, August 26, 2021

More Jam

There is a constant wrestle between price (a number) and value (qualitative and dynamic). Not everything that has value can be counted, and yet we are trying to build and grow. 

We measure ourselves through change. Often we rely on change to bring awareness of value. Change gives us a sense of direction. Adding contrast. Allowing us to tell ourselves a story. Of the past, and of the future, and how they differ. 

Why does a Jam Factory make money? Because it makes Jam. If you reinvest some of the difference between how much you sold the Jam for, and how much it cost to make, you can make more Jam next year. Expand the factory. Count more jars of Jam. Buy bigger machines. Hire more people. Use more supplies. Then it makes sense if in 20 years time the Jam factory is worth more. It produces countably more Jam. That is fundamental investing. 

What happens with speculation is the same thing has a higher price. Not because of any countable growth. Often just because of supply and demand. The same house may cost more, simply because we are not building enough houses, we are lending people money to buy houses, and more people want houses. 

You cannot treat homes as an “investment”, *and* something you want to become more affordable over time.



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