Spent my first few years investing looking at pe ratios and thinking that's all valuation was. Stock with low pe is cheap, high pe is expensive. Simple right?
Turns out way more nuanced than that.
Intrinsic value is basically what a business is actually worth based on the cash it can generate over its lifetime discounted back to today. A stock can have a high pe but be undervalued if its growing fast enough. Low pe stock can be overvalued if earnings are about to fall off a cliff.
The concept clicked for me when I started using dcf models. Forces you to think about future cash flows, growth rates, and required returns in a structured way. Suddenly valuation wasn't just a single ratio but a framework for thinking about what you're actually buying.
I use a mix of finviz for screening, valuesense for running dcf models and checking quality metrics, and sec filings for the raw data. Took a while to build the workflow but now its pretty efficient.
The other thing that helped was accepting that intrinsic value is always an estimate. Range of outcomes matters more than a single number. Margin of safety exists because your assumptions might be wrong.
Wish id learned this earlier. Would have avoided some dumb purchases on optically cheap stocks that were cheap for good reason.