Price, Value, and the American Prosperity Way

When I started out on Wall Street, the first lesson I learned was simple but powerful. 

Price is what you pay. Value is what you get. 

That principle, taught by Benjamin Graham and carried forward by Warren Buffett, is the foundation of every great fortune built in the stock market.

But here’s the thing most investors forget: value isn’t posted on a ticker. 

Value isn’t stamped on a stock certificate. It is hidden beneath the surface, inside a business's earning power. 

And if you can train yourself to see it clearly, while everyone else is chasing the latest story, you set yourself up to do what very few ever manage: buy great businesses at bargain prices.

At American Prosperity, this is our guiding approach. 

We don’t chase hype or speculation, and we don’t try to guess where the market will be next week. 

Instead, we ask one question over and over: what is this business really worth, based on the cash it can generate today and in the future?

That’s where fundamentals come in. 

A business is not just a pile of assets such as buildings and machinery. 

It’s people, culture, reputation, intellectual property, brand, and the ability to innovate. 

Put together, those assets produce something far more valuable than the sum of their parts: earning power.

In the 1990s, Apple’s tangible assets weren’t impressive. Its balance sheet looked shaky. 

But it had intangible assets, talent, design expertise, and a culture of innovation that turned a struggling computer company into the most valuable business in the world. 

Investors who understood Apple’s future earning power, not just its current numbers, built fortunes.

That’s the heart of value. 

It’s not about what a company owns today, but how it can transform those assets, both tangible and intangible, into future earnings. 

And that’s where price comes in. 

Price is nothing more than the market’s opinion at a given moment. It reflects investor psychology,  optimism, fear, greed, or despair. 

In the short run, prices swing wildly. In the long run, they gravitate toward value like a magnet.

On March 9, 2009, fear ruled Wall Street. The financial crisis had investors convinced that even the strongest American businesses were on life support. 

Microsoft was trading at just 9.5 times earnings. Texas Instruments at 8. Northrop Grumman at 10. 

These world-class companies were priced as if they had no future.

But beneath the panic, the fundamentals told a different story. 

These businesses had fortress balance sheets, strong cash flows, and competitive advantages that would not disappear because of a downturn. 

Mr. Market had lost his head, and prices collapsed far below intrinsic value.

The investors who kept calm, focused on value, and had the courage to buy when pessimism was at its peak were rewarded with life-changing gains. 

Since then, Microsoft has been up more than 3,600%, Texas Instruments has climbed 1,700%, Northrop Grumman has surged 1,900%, and even the S&P 500 is up nearly 944% (as of August 15, 2025). 

The same holds true in reverse. During bubbles, when enthusiasm pushes prices far above value, losses follow.

That’s why American Prosperity emphasizes patience and discipline. 

We know that markets are voting machines in the short run. But in the long run, they are weighing machines. 

Our job is not to predict tomorrow's vote. It’s to weigh the fundamentals and pay the right price for value.

Consider how this plays out in real portfolios. 

Many investors chase speculative assets, things like paintings, collectibles, or even cryptocurrencies, that have no earning power. Their entire bet rests on selling at a higher price to someone else. 

That isn’t investing. That’s speculating. 

True investing means buying assets that produce earnings — cash flow that compounds year after year, regardless of market mood.

Look at American infrastructure companies or financial services firms with strong competitive advantages. They might not make headlines like the latest tech IPO. 

But their fundamentals,  steady cash flows, growing dividends, and strong management give them real value. 

When bought at the right price, they can quietly compound wealth for decades.

The American Prosperity approach is built for this reality. 

We aren’t looking for lottery tickets. We’re looking for businesses that Main Street understands, with management teams we trust, and earnings power that grows over time. 

When the market misprices them, when fear drives price below value, we step in. That’s where superior returns are made.

It all comes back to this: investing is about separating price from value. 

Most people see only the price flashing across the screen. 

We train ourselves to look deeper, to study balance sheets, competitive advantages, industry trends, and leadership quality, to judge earning power not just today but five and ten years from now.

America has always rewarded those who take the long view. Our economy is dynamic, our companies innovative, and our people resilient. 

The stock market reflects that spirit. Short-term prices may swing, but over time, value wins. 

Those who focus on value and invest in the American Prosperity way will be on the winning side of history.

Because in the end, fortunes are not built by guessing tomorrow’s price. 

They’re built by buying value today at the right price, and letting time, patience, and the power of compounding do the rest.

If you want to explore this idea further, I strongly recommend Howard Marks’ latest memo. He explains it with the same clarity and common sense that have made him one of the most respected voices in investing.

If you have questions, you can send them to me at [email protected].

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To your prosperity,

Charles Mizrahi
Prosperity Insider