Improving On Buffett And Desert Cat

[Yoshi63]

Phone Booth-
You're correct in that the way I explained my response was bad, and probably flat out wrong.

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If $50 in cash can buy $80IV and $80IV is more valuable than $70IV, then $50 is worth more than $70IV.

It's simple economics. When you can have A or B and you choose A, you're expressing a view that A is more valuable than B.

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Still, I don't believe this is good reasoning. $50 cash is only worth more than $70IV BECAUSE you can find $80IV elsewhere. If you had no access to any markets to invest, then $50 cash would only be worth $50.

Here's an example of what you're saying: It's as if you visit a garage sale, find an antique piece worth $1000 selling for $5, and are uncertain if you should buy it. You reason with yourself that the $5 cash equals the $1000 antique, thus the $1000 antique is only worth $5 (despite being able to return much higher).

I'm not sure if I explained that well, but I think the point is that when a value exists, simple economics don't apply as you described.