Cinco Días. The funds’ column. “How much is it worth?”, by Eric Ollinger

25 July 2026.

Why do we usually ask “How much is it worth?” when we want to know the price of an asset?

From a financial perspective, equating “value” with “price” is an aberration. However, in everyday language, most people use the expressions “how much is it worth?” and “how much does it cost?” interchangeably when referring to a price.

We can say that, in practice, “to be worth” and “to cost” are synonyms.

In fact, the Royal Spanish Academy (RAE) fully supports the interchangeable use of both expressions, clarifying that “¿cuánto vale?” and “¿cuánto cuesta?” are perfectly valid ways of asking for a price in everyday speech. Therefore, it is not surprising that the verb “valer” (“to be worth”) is used every day in such common expressions as “how much is this coffee?”, “it was worth it”, or “stand up for yourself, my son!”

However, when we enter the world of finance, the everyday equivalence between “valer” and “costar” disappears. The poet Antonio Machado left us a reflection that fits perfectly here: “Every fool confuses value and price.” And indeed, the concepts of “value” and “price” are undoubtedly the cornerstone of any financial investment. The renowned investor Warren Buffett summed up the matter with a now-famous phrase: “Price is what you pay; value is what you get.”

Indeed, we all pay a price in order to receive something in return, but we are not all willing to pay the same price because we do not all assign the same value to what we receive. This phrase illustrates that price is an objective and unique figure, whereas the value of what we receive depends on each person’s utility, expectations, and circumstances. Two potential buyers may face the same price and yet perceive a completely different value for various objective, subjective, or even deeply personal reasons.

A simple example illustrates this well: a small bottle of water will cost €0.50 in a supermarket for every buyer, but for an adventurer lost in a desert at 50°C in the shade, its value would be incalculable and far higher than what anyone at home, just a few steps away from the kitchen tap, would be willing to pay. This simple example shows the direct relationship between value and utility. I also remember another example involving a good friend who sold his small apartment (at a very high price) to a buyer who placed enormous value — quite literally — on the tiny view from the kitchen window of the church where his late parents had been married years earlier. Sometimes, the value of an asset may include irrational or emotional components that are impossible to measure and incorporate into a mathematical model.

Link to the article: here