Quality At A Fair Price vs.The BARGAIN

Quality At A Fair Price vs.The BARGAIN

This week, we want to share with you a great article from Compass’s Chief Evangelist Leonard Steinberg regarding going after the right opportunity when looking for your next home. He underlines the fact that it is always the right thing to go after quality at a fair price. 

“A lesser known story:  As it turns out, Charlie Munger - the investor legend who passed away recently - is the person who radically shifted Warren Buffet's investment doctrine away from buying failing companies at cheap prices to focusing on buying into quality companies at fair prices.....a good lesson for any investor.....and homebuyer.

Too often I hear buyers focused on locating that elusive 'bargain'. Highly competitive markets are usually rather efficient:  many people are focused on buying good value, so the chances of locating something that is an obvious 'bargain' without competition driving up the price is slim to zero. 

I  have learned - the hard way - that bargains are often bargains for specific, tangible reasons.Yes, they may turn out to be good investments over time too, mostly related to overall market forces, but if a home is for enjoyment over many years, its unwise to discount this element of home buying. I have watched real estate around the globe closely for over half a century and it is almost always the best quality properties and locations that deliver the best long term results: both the enjoyment aspect via location and other factors as well as long term capital appreciation. 

Great investors don't simply invest in a stock price, they invest in the product, the companies. Simply look at Charlie Munger and Warren Buffet's 'fair price' purchases over the years to see how they fared.”


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