Finance and Investing
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With an account, you can revise, criticize, and comment on ideas.You are fallible and the future is unpredictable. It is important to buy assets for significantly less than you think they are worth. The cheaper you buy something, the more margin you have for things to go worse than anticipated. This is called a 'Margin of Safety'. Paying a higher price for something inherently makes the investment more fragile and less profitable.
A crappy business can be a good investment if you get it cheap enough, and a wonderful business can be a terrible investment if you pay too much. (The dream is getting a wonderful business for cheap.)
It is important to buy assets for significantly less than you think they are worth. The cheaper you buy something, the more margin you have for things to go worse than anticipated.
According to Austrian economics, all value is subjective. How can we then know what an asset is intrinsically worth?
I was careful to say "It is important to buy assets for significantly less than you think they are worth". Value is certainly subjective (in the sense that things are valued differently by different people).
As for methods of valuation, there are many out there, each with their pros and cons. Discounted cashflow (DCF) valuations are my preferred method as they directly address the purpose of investing: giving up value today in exchange for more value in the future. The key problem with this is that the future is inherently unpredictable, so building a DCF involves educated guesswork and is imprecise.
The flaws in valuation methods are why we should try to buy assets at steep discounts to our valuations of them, in case we are wrong.