John C Bogle, the founder of Vanguard is becoming one my my favorite speakers on financial markets. His speeches are really thought provoking and gives many simple ideas. His speeches are available on his blog.
I just read this excellent speech where he revisits various concepts of finance. He discusses valuation really well:
By the late 1980s, based my own first-hand experience and my research on the financial markets, I concluded that the two essential sources of equity returns were: (1) economics, and (2) emotions. What Keynes had described as enterprise I called “economics.” What Keynes termed “speculation,” I found well-defined by “emotions.” The former I defined as investment return— the initial dividend yield on stocks plus the subsequent annual rate of earnings growth. The latter I defined as speculative return—the change in the price investors are willing to pay for each dollar of earnings.
Simply adding speculative return…
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Utopia, you are standing in it! 
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