Value, Value—What Exactly Is Value?

What exactly is value? Have you ever seriously thought about it?

You might pause. Value? We say it all the time—this thing has value, that investment has no value, time is the most valuable asset. But when you're asked to define what "value" actually is, most people would hesitate.

Let's unpack this term.

I. The Multiple Dimensions of Value

The word "value" is full of tension because it has multiple dimensions. In different contexts, value means vastly different things. You can't measure everything with a single scale, just as you can't understand value with a single definition.

Economic and utility value is the most intuitive. A bottle of water costs twenty dollars at a convenience store, but in a desert it could trade for a life. The water hasn't changed—what changed is the context that endows it with its utility. In economics, value is essentially a function of utility and scarcity. When supply far exceeds demand, value goes down; when demand far exceeds supply, value goes up. This sounds like a tautology, but most people make mistakes because they ignore the scarcity variable.

Cognitive and experiential value is another layer. The same cup of coffee costs fifty dollars at a roadside stall and three hundred dollars at a specialty café. The beans might come from the same estate, but the latter provides space, atmosphere, service, even the feel of the cup—these intangible experiences are also part of value. You're not just paying for caffeine; you're paying for that hour of composure. This explains why products with identical functions can have prices differing by multiples: you're not just buying function, you're buying an entire experience package.

More abstractly, there's existential and philosophical value. A painting, a poem, a belief—these things generate no cash flow, can't even quantify utility, yet humans are willing to pay enormous costs for them. Why? Because they carry meaning—and meaning itself is a dimension of value. How much is Van Gogh's "Starry Night" worth? There's no answer, because it has transcended utility calculation and entered the realm of collective human consciousness.

So when we talk about "value," we're actually discussing a multidimensional concept. Economic value, experiential value, meaningful value—these three dimensions intertwine to form our complete understanding of the word "value." Ignoring any dimension leads to biased understanding.

II. Beyond Philosophical "Worthiness": A Deeper Look at "Value"

How does the dictionary define value? An evaluation of the importance, usefulness, or meaning of something by a person or society. But while this definition isn't wrong, it's far from sufficient to cover the full meaning of "value."

For me, in one sentence: Value is the market's consensus on the story behind an object.

This pulls value from the realm of "objective attributes" to the level of "subjective consensus." Value isn't something an object inherently possesses; it's something the market endows. And the basis on which the market endows value is often the story behind that object. This concept of value applies to both the economic/utility and cognitive/experiential levels mentioned above.

Levi's jeans versus generic jeans: the fabric cost may differ, but certainly not by as much as the final selling price. Because behind Levi's lies 160 years of American worker culture, the history of the Gold Rush, James Dean's rebellious image in "Rebel Without a Cause"—these stories accumulate into consensus, and consensus forms a premium. We're not just buying pants; we're buying part of that story.

The same applies to an Hermès bag versus a cheap leather bag. Leather cost, labor hours, design—these are visible differences. But what truly creates the gap is the story behind Hermès: craftsmanship, heritage, scarcity. A bag artisan spends eighteen months completing one Birkin bag. That story itself is valuable. The market believes this story, and consensus forms.

Stories are not scams; they're one of the underlying logics of how human society operates. We are storytelling animals by nature, and value is often a byproduct of story. Ignoring story and only calculating cost means missing value itself.

But this doesn't mean we should blindly believe all stories. We need to ask: Does anyone believe this story? Are there enough believers? Do these believers have enough purchasing power? If all three answers are yes, then this story will have value—regardless of whether it's "true."

III. Price and Valuation

Precisely because value is abstract and subjective, we have the phenomenon that "price does not equal value."

Price is the number the market gives at a given moment, the consensus reached by buyers and sellers at a certain second. But this consensus can deviate from true value—and often does. The market will always overestimate or underestimate a commodity because the market is made up of humans, and humans are full of biases.

You've probably heard Graham's analogy: Mr. Market is a manic-depressive who offers you high prices when excited and dump prices when depressed. But Graham had another, more crucial statement: Over time, market valuations gradually correct and approach true value.

This is why the phrase "price does not equal value" has meaning—if price always equaled value, the phrase would be nonsense. Precisely because there's deviation, there's opportunity.

But here's the trap: How do you know whether you're currently in deviation or at fairness? There's enormous noise in the market, and the vast majority of people mistake noise for information and information for noise. You think you see value, but you might just be seeing someone else's bias.

What's more troublesome is that the market can stay irrational longer than you can stay solvent. As Keynes said: "The market can remain irrational longer than you can remain solvent." Being right doesn't matter if you can't hold on until the market corrects.

So the phrase "price does not equal value" sounds simple, but truly internalizing it requires two things: first, the ability to judge value; second, the patience to endure the deviation period. Neither can be missing.

IV. Accumulating Wealth = Counter-Human Nature

Take stocks as an example. Wanting to watch the board after buying is the brain's evolutionary instinct to pursue the illusion of control. The human brain inherently dislikes uncertainty, so we constantly check, constantly confirm, trying to find patterns in random fluctuations.

Neuroscience research shows that when facing uncertainty, the brain's amygdala activates, producing anxiety. To alleviate this anxiety, we do many things: watch the board, read news, ask experts, join investment groups. These behaviors are essentially attempts to rebuild a sense of control.

But if you only act when certain you've bought cheap, the logic reverses. The market always overestimates or underestimates; short-term fluctuations cannot reflect true value. You can only trust time to give answer to your judgment.

This sounds simple but is extremely difficult in practice. Because it requires you to fight your own instincts—when the market panics, you must suppress the urge to flee; when the market is euphoric, you must resist the temptation to chase highs. This isn't a knowledge problem; it's a character problem.

Accumulating wealth is difficult not because you don't understand technical analysis, financial statements, or macroeconomics. It's difficult because accumulating wealth is, in essence, a counter-human-nature practice. You must remain calm when others are fearful, remain restrained when others are greedy. This isn't about white-knuckling through with willpower; it's about using understanding of value to endure those difficult moments.

There's enormous noise in the market, and the vast majority of people mistake noise for information and information for noise. The headlines, analyst ratings, influencer recommendations you see every day—most of these are noise. But the human brain inherently likes information, even if it's noise, because information gives a sense of control. To improve, you must learn to distinguish what truly affects value from what merely induces anxiety.

V. Making Changes

When buying anything, prioritize value over price. Many factors determine value; any variable affecting a commodity's narrative relates to value and should be considered.

This isn't about becoming an analysis maniac. It's about cultivating a habit: before paying, ask yourself—What am I buying? Is it the thing itself, or the story behind it? Do I believe this story? If I don't, why does the market? If I do, is my belief grounded?

These questions have no standard answers. But the process of asking them gradually detaches us from "price reflex" and enters "value thinking mode."

Specifically, you can consider from the following angles:

First, where does this thing's scarcity come from? Is it natural scarcity (like land, gold) or artificial scarcity (like limited editions, membership systems)? Natural scarcity tends to be more durable; artificial scarcity depends on whether the underlying story can sustain.

Second, does this thing's narrative have consensus? It's not about whether you believe it, but whether the market believes it. You may not believe in Bitcoin, but you can't deny that many people do. The strength of consensus determines the strength of value.

Third, what are this thing's value dimensions? Is it utility value, experiential value, or meaningful value? Different dimensions of value correct at different speeds. Utility value corrects quickly; meaningful value corrects slowly.

Fourth, does time stand on your side? Some things appreciate over time (like fine wine, fine art); some things depreciate over time (like electronics, fashion). You need to be clear which type you're buying.

If you know you got a bargain, let it go. Time will prove you right.

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Value is a multidimensional concept—utility, experience, meaning, three dimensions intertwined. Market consensus forms price, but time gradually corrects deviation. Accumulating wealth is a counter-human-nature practice: remain calm when others are fearful, remain restrained when others are greedy. This isn't about white-knuckling through with willpower; it's about using understanding of value to endure those difficult moments.