In this episode of Money Lessons, Andy tackles one of the most foundational questions in investing: what is a stock actually worth? Returning to value-investing pioneer Benjamin Graham, Andy walks through the three primary lenses professional analysts use to estimate stock value—relative valuation, asset-based valuation, and cash-flow-based valuation—and shows how each one offers a different angle on the same question. 

Using the dot-com bubble as a cautionary tale, Andy illustrates what happens when relative valuation becomes untethered and stock prices disconnect from underlying business fundamentals. The unifying principle: speculation can run for surprisingly long stretches, but eventually a business must generate cash, or its price will be revalued to reflect what's actually there.

In this episode of Money Lessons, Andy traces the historical shift from dividend-focused investing to earnings-based valuation, showing how mandatory financial disclosure in the 1930s transformed the way investors evaluate stocks.

He walks through five essential equity metrics—earnings per share (EPS), the price-to-earnings (P/E) ratio, the dividend payout ratio, the price-to-sales (P/S) ratio, and the price-to-book (P/B) ratio—explaining what each one measures and when to use it.

Andy connects these modern tools back to Benjamin Graham's pioneering work in value investing and shows how they build on dividend and buyback concepts covered in earlier episodes.