VDI Insights: Understanding Value as a value driven investor

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-Tim Murphy

Today, I want to talk about understanding value.

Most people, when they're thinking about making an investment in any type of asset, they are contemplating value.

What does that mean?

For me it's asking myself the most important question: Is it expensive or is it cheap?

Whenever you're going to buy an asset, and in our case, it's going to be real estate, but it could be Bitcoin, gold, stocks, or any type of commodity, you have to ask yourself, is it expensive or is it cheap?

Now, as Value Driven Investor, that's what we're asking ourself all the time.

Is it expensive or is it cheap?

But as a true value driven investor we are always focused on… Is what we are doing a good thing, or just something to make money.

Because as a Value Driven Investor, it is about doing a good thing. Because value and ROI is not always about dollars and cents here in our community. It's also about purpose & impact.

I want to go into a blog that I wrote and it answers the question of how do I understand value.

Here we go.

Value comes in all shapes and sizes as a Value Driven Investor, you need to always be asking yourself this question, is it expensive?

Or is it cheap?

“It” refers to the asset you are considering, be it real estate, Bitcoin, stocks, bonds, commodities, or pretty much anything.

But today, and as an investor, we're talking about assets, and the trick to establishing your answer to this question lies in the data you use to make your decision.

The best data is personal experience. I'm a big believer in following trends and the best data I've ever found is data on my own personal investments and how those investments have done over the course of time.

That means if you want the best data, you better get in the game.

But if you are looking at investing in new asset classes, you need to start someplace. That someplace starts with finding data.

You must be willing to use triangulation. This is something I talk about on a regular basis. You always want to find three different data points with three different perspectives that evaluate the same asset class or the exact same asset.

This means you must look at data that represents things you believe are accurate and data you might believe is manipulated.

Truth is not found in what you believe the truth to be. I can't stress this enough. People get so manipulated by the media. They get so manipulated by the talk, the influencer, and opinions.

You need to make decisions based on FACTS and TRIANGULATION. Getting information from multiple sources, even sources that you don't believe are accurate, or you don't believe in, is extremely important to give you a well-rounded perspective to keep you focused on the facts not the hype.

The world we live in is filled with so much information, the trick to navigating all this information lies in fact based results.

Personally, I love trends and I love following trends.

For example, the price of homes, what a home sells for is a fact. You can watch the number of homes going on the market. You can watch the number of homes selling, and you can see what each home sold for. Sold data is usually found in the county record.

Sure, there can be some manipulation that happens in some of these deals. The buyer could roll costs into a the sales price, inflating that sales price. But this reveals another trend. And you can make sure to add that trend to your overall algorithm.

The true value of one investor to the next is how we look at data and answer the most important questions.

Is it expensive or is it cheap?

A few tools I use in my triangulation are: