In @HowardMarksBook's memo early this year, one key thing I realized is how wrong I was to dismiss some businesses because I thought they were overvalued simply after looking at the P/E, P/S ratio etc.

You can't determine a business is overvalued without knowing the in-depth qualitative fundamentals of the business, because otherwise where is your edge? Anyone in the world can simply look at a company's P/E ratio.
I know this seems obvious, but so many people on fintwit are very guilty of this - myself included.

Unless I really know and understand a business, even if it has a seemingly absurd P/E or P/S ratio, I will refrain from concluding it is overvalued. It's just lazy and wrong.
The weird thing about this is that when I'm normally researching a business, I totally understand this about valuation and do in-depth research and determine if it's undervalued. But then I'm quickly dismissive of a tech company that trades at 50x earnings and say it's overvalued

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THREAD: 12 Things Everyone Should Know About IQ

1. IQ is one of the most heritable psychological traits – that is, individual differences in IQ are strongly associated with individual differences in genes (at least in fairly typical modern environments). https://t.co/3XxzW9bxLE


2. The heritability of IQ *increases* from childhood to adulthood. Meanwhile, the effect of the shared environment largely fades away. In other words, when it comes to IQ, nature becomes more important as we get older, nurture less.
https://t.co/UqtS1lpw3n


3. IQ scores have been increasing for the last century or so, a phenomenon known as the Flynn effect. https://t.co/sCZvCst3hw (N ≈ 4 million)

(Note that the Flynn effect shows that IQ isn't 100% genetic; it doesn't show that it's 100% environmental.)


4. IQ predicts many important real world outcomes.

For example, though far from perfect, IQ is the single-best predictor of job performance we have – much better than Emotional Intelligence, the Big Five, Grit, etc. https://t.co/rKUgKDAAVx https://t.co/DWbVI8QSU3


5. Higher IQ is associated with a lower risk of death from most causes, including cardiovascular disease, respiratory disease, most forms of cancer, homicide, suicide, and accident. https://t.co/PJjGNyeQRA (N = 728,160)