A brilliant piece of writing from Michael Mauboussin and Dan Callahan at Morgan Stanley that was formative in what I personally believe when it comes to valuation.
[…] we want to suggest the mantra “everything is a DCF model.” The point is that whenever investors value a stake in a cash-generating asset, they should recognize that they are using a discounted cash flow (DCF) model. […] The value of those businesses is the present value of the cash they can distribute to their owners. This suggests a mindset that is very different from that of a speculator, who buys a stock in anticipation that it will go up without reference to its value. Investors and speculators have always coexisted in markets, and the behavior of many market participants is a blend of the two.
Original paper linked in this post’s title.