A BRIEF SUMMARY:
• Most people assume price equals value. They are often far apart. From stocks to shopping, the difference matters more than we think
• Financial markets are driven by mood in the short term. Just because the price drops does not mean the business has gotten worse; sometimes, it just gets more attractive.
• Luxury brands are experts at inflating prices without changing function. The trick is to know when you are paying for the product and when you are paying for the story.
• A low price can be expensive in disguise. Whether it is a flimsy item or a struggling stock, cheap is not always a bargain. Knowing the difference can help you save a lot.
They are not the same thing Warren Buffet once said that price is what you pay, and value is what you get. This is a simple line that few people live by and most forget. Think of an ice cream on a hot day: at that moment, you may pay triple just to cool down. The ice cream has not changed. That gap between what something costs and what it is actually worth to you plays out across investing, shopping, and life. This is the hallmark of value investing, and the lesson is universal. Price is visible, and value takes judgment.
Markets are priced daily and are valued over time
Financial markets constantly confuse this distinction. A great company can—and usually is - punished in a panic. A week company can fly on hype.
Price is set by the last trade—what someone has paid in the latest transaction. This is often set based on the prevailing mood. Value unfolds slowly. Investing is about knowing the difference. This is why investors get excited when good businesses get cheaper! The price fell, but the value did not. Markets frequently get it wrong in the short term and, over time, value asserts itself.
Luxury goods understand this better than anyone
High fashion and luxury watches are experts at separating price from value. They inflate pricethrough brand power, scarcity, and narrative. Does the actual utility justify this? Does a THB 300,000 bag hold more than a THB 3,000 one? People pay for perception, not function. If you know going in that you are paying for story, image, and identity —then at least you are buying with clarity. When price and worth get confused for the same thing, that’s when trouble starts.
The illusion of cheap
Low prices often trick us. A cheap product that breaks easily needs frequent replacement, and wasting your time can end up costing more. There is a reason phrases like “buy nice or buy twice” exist. True value considers longevity, reliability, and purpose, not just the price tag. The same is true in investing: there is a reason some stocks are cheap. Sometimes it is a gift—a mispriced opportunity. Often, it is a warning sign. Cheap is not always a value, and sometimes things are cheap for a reason.
Beyond the price tag
Understanding the difference between price and value can sharpen decision-making. You stop jumping at discounts just because something is on sale and start asking whether it is worth it. This applies to an investment, a meal, or a large purchase. The shift takes place from chasing bargains to making smart calls. In a world full of flashy offers and price tags designed to tempt, being value-focused helps you use your resources better.