This series of posts dives into the world of intrinsic value with an eye toward getting involved.
What intrinsic value? That’s a question that I’ve been asked a lot and is one I’ve been thinking about for a long time. Intrinsic value is, to me, the idea that something is valuable because it is unique. I also think that the intrinsic marketplace has something to prove and, as a result, is kind of a paradox in that it’s a place where you can buy something and you can’t sell it.
Thats a great question because we at Intrinsic Value think that there are two distinct types of intrinsic value: the intrinsic value that comes from being unique and the intrinsic value that comes from being valuable to someone else. The intrinsic value of a car is really a case in point. It has intrinsic value in that it is not unique but we could get a new car for the same price as an old one and its value is tied to the value of a new car.
In our case we are talking about the intrinsic value of a car. Intrinsic value is a new concept that came out of the work of Richard Thaler, Thomas Suddendorf, and other economists. This idea of intrinsic value is that value is not just a result of price but something that is valuable to someone else.
Intrinsic value is a great way to describe the value of a single car. It is the value that is given to the single car itself, not to the entire lot of cars. For example, if we bought a car with $100,000 in intrinsic value, we would pay $100,000 in cash to own the car. But once we owned the car, we would only get $100,000 in cash.
I think intrinsic value describes a lot of the value we give to the things we own. It’s why I bought a $30,000 house for $500,000. I think the value of a house is not just the money we get in return, but the value of the house itself.
In the intrinsic market, the value of a car in your possession is also affected by how much money you have and how good your driving skills are. So if you have a nice car, you might give it more intrinsic value. If your driving skills are not very good, you might give something less intrinsic value to the car.
My friend Mike is a proud owner of a 30,000 house (not the one with a 30,000 TV). He is a smart man, and was very generous in showing what he owned. He was very clear about not only wanting to keep his house, but also how much he wanted to keep it, and how much he wanted to leave it, and what he was willing to give up to keep it.
We are in the process of putting a new home under construction. I am the owner, and I was very clear to my friend, who is also a very good friend of mine, that I was not going to get something for nothing. I had made a commitment to him that I was going to get an intrinsic value for the house that I could use to build a business around. I made sure he understood that, and he did agree.
And that’s where the problem arose. First, I asked him to look through the bank records and see if he could find any business licenses or tax records that could tie any of the money that was going to be spent to the house to any other business. This was, of course, an impossible task, but I explained that if there was a way to prove that the money was going to be spent to the house, then that would be the end of it.