“When I was a young man, I had the opportunity to meet one of Wall Street’s legends, Arnold Bernhard, founder of Value Line Investment Survey, called “the most trusted name in investment research.” Bernhard pioneered Value Line, famous for its one-page assessment of publicly traded companies.

We had lunch together at his offices on 3rd Avenue in mid-Manhattan, and I shall never forget the occasion. He was in his late eighties by then and had only a year or two to live. Bernhard wanted to talk about his offshore properties in the Bahamas (I lived in Nassau for two years, 1984-85), but I had a more philosophical interest.

I asked, ‘Mr. Bernhard, you have lived a long, successful career on Wall Street. If you could reduce your approach to investing to one sentence, what would it be?” He reached for his cane, stood up, and walked slowly toward the window overlooking 42nd Street. “Young man,” he said deliberately, “the secret to successful investing can be reduced to two simple words: know value.”

He said that everyone on Wall Street knew the prices of stocks and other assets, but few understood what these assets were really worth, or what they would be worth in the future. Paraphrasing Oscar Wilde, Bernhard declared, ‘Brokers, security analysts and investors – the whole lot – know the price of everything and the value of nothing.”

According to Bernhard, investors have no sense of history. They know little about what makes markets move and are only successful as long as the trend doesn’t change. But what happens when the trend changes and a bull market turns into a treacherous bear market, or vice versa? “Then people find out what real values are!” concluded Bernhard.”