How To Visualise Value

Value can be hard to quantify. It is a complex subject. Teaching it to others takes time and patience. Many do not get it the first time around. There are many moving parts.

In the last Just in Time article, I spoke about value in the context of the broad spectrum between art and science. Today’s article is all about art.

I recently discovered the work of Jack Butcher. You can find him on Twitter @jackbutcher. His work is called Visualize Value (@visualizevalue).

This image represents an artistic impression of the difference between timing the market and time in the market — just a few lines in an image and such a profound representation.

Seasoned investors have spent many hours trying to convince their clients of this phenomenon. Here it is, so clearly visualised by Jack Butcher.

Price and value often get confused. Warren Buffett said, “price is what your pay; value is what you get”. That is interesting but difficult to understand. Jack Butcher’s interpretation of the difference between turning a screw and knowing which screw to turn gives a whole new insight into the difference between price and value.

These two Jack Butcher visualisations are just the tip of the iceberg. Your time will be well spent exploring his insightful work.

Many years ago, I learnt from a great teacher that using an analogy is a smart way to describe a difficult concept. An analogy can use a theme that many are familiar with and connect to a more complex subject. The art is in connecting the two issues so that it makes sense to the audience. The genius is leaving just enough space between the two subjects so that the audience can make a small leap for themselves. In making the leap, the audience is rewarded with a dopamine hit that helps the subject matter stick, just like catching the punchline of a good joke.

Jack Butcher’s Visualize Value requires that you apply your mind and make the leap to connect the dots. When you get it, it sticks.