How do you know when a stereo sounds good?

A stereo system sounds good when the experience of listening is about enjoying the music and not fretting about how the sound compares to some absolute audiophile standard. 

In my experience, listeners can achieve this by choosing their main system components and speakers to achieve the type of sound they most enjoy with the music they most enjoy listening to.  Cables and tweaks will not get you there if the main components and speakers are not aligned toward your preferences.  Once I figured out that tone and dynamics are most important to my listening enjoyment, then putting together a satisfying system became much easier.

🤣

when the music becomes so INVOLVING you forget about the equipment, get lost is the experience

Do you have a suite of measurements that removes all shadow of a doubt that you are getting good sound, sound that you enjoy? 

Yes.

+1 point each time I have to stop typing because the vocals demand my full attention

+1 point each time my foot involuntary taps the rhythm

+1 point goosebumps

+1 point all thoughts outside the music are ceased

-1 point each time I think "is VTA correct?"

+3 points when an album urges a segue (e.g. Listening now to Lowell George - "Can't Stand The Rain". The horns are hitting hard, begging me to grab my copy of Van Morrison - It's Too Late to Stop Now

-3 points each time my brain switches into "critical listening" mode, when I focus on descriptors like how deep is the soundstage vs. relaxing and focusing on the performers playing together

-5 points each time I think "what's on tv?"

@ted_denney even all that is more "measury" than I want to get. The more I want to do math and measure, that's evidence that I'm enjoying the music less. That's your job ;-)

Cheers,

Spencer