Think of great investors as better at reading the odds, but with an important twist: they also understand that what you pay for changes those odds dramatically.

It’s like the lottery example but now consider the ticket price. If a lottery ticket costs $1, and you have a decent chance of winning $100, that might be worth it. But it’s a bad bet if the same ticket costs $90, even with the same chance of winning $100. Great investors understand both the odds AND what price makes sense for those odds.

This is why the same investment can be brilliant at one price and foolish at another. A great company might be a terrible investment if you pay too much, while an average company could be an excellent investment if you buy it at a bargain price. Superior investors are skilled at recognizing both:

1. The likely future outcomes (what’s in the bowl)

2. Whether current prices make those odds attractive (what you’re paying to play)

They know that even the best business in the world isn’t worth an infinite price, and sometimes mediocre businesses are great investments simply because they’re too cheap.

LINK Unpack the implications of record-high metrics 📊 and strategize your next investment moves in a dynamic economic terrain! 💡

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