The Difference Between Price and Value
by Seth Klarman
In capital markets, price is set by the most panicked seller at the end of a trading day; value, which is determined by cash flows and assets, is not. This is both the challenge and the opportunity of investing: to carefully sift through the markets to find the greatest divergence between price and value, and to concurrently avoid the extreme emotions of the crowd and, indeed, to take a stand against them.