What do we mean when we say it today?
These days, we've change the order of this phrase a bit. We almost always hear something like, "discretion is the better part of valor." And we've changed the meaning, too. Nowadays, it means that sometimes it's better to take caution than make rash decisions.
Think about it: it's probably better to wait and see in some situations than go rushing in and hurting yourself. It's good not to be rash. We can get behind that. The funny thing is that we're taking advice from someone who doesn't have an ounce of valor or honor in his entire body.
See, Falstaff is making fun of the concept. He cares more about himself than anyone else. He even lies about being brave for more glory. And not so he can save his life, either. He may tell himself that, but he's actually in it for the praise from Prince Hal and King Henry IV. Why else wouldn't he give up the jig when they arrive?
Hotspur is dead, and Falstaff's life has already been saved. So why continue the charade? Well, the truth is that he wants the money and praise that comes with killing the main traitor and rebel leader. If he takes the credit for Hotspur's death, he can continue his fly by the seat of his pants lifestyle, all with the many thanks of a grateful king.
It's interesting that we've made this phrase a positive, wise thing these days. We all go around town saying this now, but when it was first said, it was by an old disgraced knight who was really just looking for his next party to start. We bet next time you hear someone say this, you'll be thinking a whole different thing than they are.