It's simply to get the most value per dollar spent. Represented as the ratio between value (V) over E. In other words E is expense which is how much cost you put into something and V is the amount of value you can potentially get out of it.
How does this apply to the stock market? There are many formulas which can give us the fair value of a stock such as Ben Graham's below:
V = E A R N I N G S × ( 8.5 + 2 g )
V = Value.
Earnings = Trailing Twelve Months Earnings
8.5 = P/E base for a no-growth company
g = reasonably expected 7 to 10 year growth rate
I may choose one, or none, or I may choose all but I do my best to apply known methods to quantify the value of an investment.
The trick to investing so far is simply to discover value prior to other people and put as much money into undervalued investment opportunities as one can afford to lose. If one knows the formulas to use to discover the value of a stock (alternative to Ben Graham's formula is Acquirer’s Multiple) then one can create a spread sheet which automatically screens your stocks by that formula.
And then one can simply filter opportunities using these value estimation formulas until the opportunities are narrowed down. It is not gambling and it works for cryptocurrency like Bitcoin, it works for stocks, it works for anything which one must to put money in and expect something of value in return.
The better the ratio I have of value/dollar the better I can feel about my investment decisions. Speculation is a different ballgame entirely and is more like gambling while investing is more about discovering value. How could this apply to cryptocurrency? If one can figure out which projects have the most value to offer and invest in those then the value to dollar number is higher and that is winning the value game. The difficult thing about crypto is unless one can read code, unless one understands cryptography, unless one really understands the psychology of people (the masses) and trends then one will have a difficult time assessing the value of a crypto token.
