One of the best anecdotes I have read to describe the difference between “value” and what we internally call “real value” comes from Charlie Munger, Vice Chairman of Berkshire Hathaway. I will paraphrase:
In 1918, the Nobel Prize winner for physics, Max Planck, frequently toured Germany giving lectures on new quantum mechanics. Having heard the same lecture repeatedly for such a long time, Planck’s chauffeur piped in one day and said that he knew it so well that he could deliver the speech himself in Munich. Planck could sit in the front row with the chauffeur’s cap on and take it in for his amusement. The chauffeur delivered the lecture impeccably, and the audience was extremely pleased. After the lecture was completed, someone in the audience posed a question. The chauffeur, knowing nothing except the content of the speech, looked at the audience member and said, “That question is so simple, even my driver can answer it.” The chauffeur had Planck answer the question.
“Chauffeur Knowledge,” as Munger calls it, is what we hope to avoid at all costs. To us, defining what we do not know and what we are not good at is just as important as defining what we do know. This seems to be the only way one can really establish what their real value is and remove the knowledge which falls under the “Chauffeur” category.