Let us say that you would like to buy a new car. A lot of people want a new car. There is high demand for a new car. That is why the price level is fairly high, at least equal to the average individual’s annual income. In order to get a new car at a price you can afford within reason, without going heavily into debt, you must identify what other people are eager to have on their new car. High demand with limited supply raises the price. The key as a buyer is to be flexible on the value proposition for what you are buying. Examples of what people are eagerly demanding in their new car might be, leather, heated seats, European, BMW, Mercedes, aerodynamic, turbo charger, tinted windows, coupe, convertible, silver, black, chrome tires, efficient, hybrid, and SUV.
These are all things that raise the price, because everybody is competing for these traits on their new car. To get a new car, you must flexibly alter as many of these popularly desired variables as you can bear. Cloth, normal seats, Korean, Chinese, boxy, small engine, clear windows, four door, bright blue, green, plastic tires, inefficient, internal combustion engine, and tiny. If you do all these things to your new car purchase proposition, you will find a new vehicle within reason that you can afford, such as the Nissan Versa or Mitsubishi Mirage.
The problem with most buyers is their thirst to compete with their peers. They have to have everything, or they will take nothing. This common human fault is something that the shrewd investor can heavily profit from. Those who walk the moderate path pick up lots of slightly aged apples that still taste great.
The typical investment mantra is buy low, and sell high. Buffett says never buy something you would not want 10 years from now.
Martin Lustgarten is devoted to making your life easier. He likes seeing the smiles on people’s faces when they finally get financial tricks. Martin Lustgarten wants to see you financially succeed.
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