Each time I refreshed the page, someone else was outbidding me by $10.

I was on my first eBay auction — for a pair of cuff links with the presidential seal set in cobalt blue. They were a beauty.

Now, this was back in 2000, when my computer was hooked up to a modem in my den. There was a lag between when I submitted a bid and when it was accepted.

But I really wanted these cuff links, so I bid up the price. It was exciting in the heat of the moment.

In the last few minutes before bidding close, I had the highest offer of around $70. That didn’t last long, though. Soon, I was bidding as high as $275. And in the last few seconds, I was outbid again.

So, I upped my bid to $300 … and after waiting for the screen to refresh, I won.

I was a pretty happy camper at first. But then, reality set in…

That same pair of cuff links could be bought at the White House gift shop for $75. I’d just paid $230 more than the actual selling price. And I didn’t even own a shirt with French cuffs!

Boy, did I feel like a monkey’s uncle.

The thrill of bidding and winning had blinded me into buying something at a ridiculous price.

Twenty years later, I still have those cuff links in my drawer. I occasionally wear them now to remind myself what I fool I was.

But while I’ve learned my lesson, many investors haven’t.

They still do the same thing in the markets: They pay a high price for stocks that are trading considerably more than their underlying worth. Why? The thrill of the market.

Don’t Gamble in the Market

But you see, making money in the market is simple. All you have to do is buy financially sound companies when they trade at bargain prices. Then, you sit and wait for them to soar higher.

Yet many everyday investors get swept up by their emotions. They want the thrill of immediate “wins.” They see stocks that are more story than substance and want to join the buying frenzy.

But you’ll surely never reach your financial goals that way. It’s not the way to build your retirement account, buy a vacation house or travel anywhere you’d like. That’s why I’m here to help Main Street Americans just like you reclaim their financial futures and dreams.

I walked away from my 37-year Wall Street career and used that experience to develop a simple approach to buying stocks. One of my rules is to focus on the price you pay.

Because at the end of the day, price is what you pay, value is what you get. By buying great businesses when they’re selling for bargain prices, you’ll never pay too much.

Instead, you’ll be well on your way to growing your nest egg.

Charles Mizrahi
Charles Mizrahi

Editor, Alpha Investor Report