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This blog teaches you how to invest in stocks the way professional analysts do — using real methods, real math, and real reasoning. No tips, no guesswork, no jargon you have to look up somewhere else.

The material is organized into series. Each series covers one topic completely, from the ground up. You can start anywhere, but if you’re new to investing, the Intrinsic Value series is the right place to begin — it’s the foundation everything else builds on.

Start here: Introduction: Why This Blog Exists

Also: Are You Investing or Gambling? — a short essay on the difference between investing and speculation. Worth reading before diving into the series.

The Rules — First Principles of Investing

Before strategy comes philosophy. These eight posts cover the principles that apply to every form of investing — the discipline, patience, and process that determine whether any approach succeeds or fails. Start here before anything else.

  1. Part 1: Buy and Hold — Why time in the market beats timing the market, the tax drag of frequent trading, and the cost of being wrong twice.
  2. Part 2: The Magic of Compounding — Why compounding is the most powerful force in investing, why time is the one input you cannot buy back, and what the numbers actually look like over 30 and 40 years.
  3. Part 3: Minimize Friction — Fees and taxes do not feel painful in any given year, but they compound against you just as surely as returns compound for you. How to keep more of what the market gives you.
  4. Part 4: Reinvest Your Dividends — Why taking dividend payments as cash is almost always the wrong choice during the accumulation phase — and how reinvesting them automatically builds a larger, faster-compounding portfolio over time.
  5. Part 5: Don’t Try to Time the Market — Why market timing fails even for professionals, and why dollar-cost averaging — investing a fixed amount on a fixed schedule regardless of price — is the discipline that makes buy-and-hold actually work.
  6. Part 6: Don’t Fall in Love With a Stock — Why attachment to a position is the most reliable way to turn a good investment into a bad one, and the two conditions that should drive any sell decision.
  7. Part 7: Being Wrong Less Often — Why knowing the rules is not enough — and how a written, pre-decided framework for entry and exit removes emotion from investment decisions and makes you wrong less often over time.
  8. Part 8: Know What You Own — Why understanding the business behind the stock is the foundation of every other rule, and what happens when investors skip this step.
  9. Part 9: Only Own Wealth Creators — Why ROIC vs. WACC is the single most important test of any business — the difference between a company that compounds your money and one that quietly erodes it — and why this question sits above every other rule.

Intrinsic Value

What is a stock actually worth — and how do you calculate it? This series walks through the complete process, step by step, using a method called a Discounted Cash Flow model (a way of estimating what a business is worth based on the cash it’s expected to generate in the future). Start here.

  1. Part 1: The Cash a Business Generates — The core idea: what free cash flow is, how it’s built, and the three things that determine what future cash flows are worth.
  2. Part 2: Why a Dollar Today Is Worth More Than a Dollar Tomorrow — The time value of money, present value, and how discounting works — the idea that makes all the calculations make sense.
  3. Part 3: Two Types of Free Cash Flow — FCFF vs. FCFE: which version applies to which companies, and why the distinction matters before any calculations begin.
  4. Part 4: Calculating Free Cash Flow to the Firm — The FCFF formula built line by line: EBIAT, CapEx, D&A, and working capital — where each number lives in the financial statements and how they fit together.
  5. Part 5: Where the Growth Rate Comes From — The fundamental growth rate derived from two things the business reports: how much it reinvests, and what it earns on those investments.
  6. Part 6: Risk and the Discount Rate — WACC built from scratch: cost of equity (CAPM), cost of debt (coverage ratio → synthetic rating → default spread), capital weights, and what the discount rate tells you about value creation.
  7. Part 7: Putting It All Together — The complete DCF model assembled: five years of projected FCFF, a terminal value, a WACC discount, net debt subtracted, and an intrinsic value per share compared to the market price.
  8. Part 8: Why Financial Firms Are Different — Why banks and insurers can’t be valued with FCFF, what makes them structurally different from other businesses, and why FCFE and the cost of equity replace WACC for financial firms.
  9. Part 9: When to Sell and Why — The four sell triggers that close the Intrinsic Value framework: price exceeding intrinsic value by 20%, ROIC falling below cost of capital, a broken investment thesis, and the DRIP trap. The sell discipline that makes the buy discipline complete.

Valuing Financial Firms

Banks, insurers, and other financial companies operate by rules that break the standard valuation models. Debt is their raw material, not their financing. This five-part sub-series picks up where Intrinsic Value Part 8 left off — showing you exactly how to value financial firms using Free Cash Flow to Equity (FCFE) and a cost-of-equity discount rate instead of WACC.

  1. Part 1: What Is FCFE and How Does It Differ from FCFF? — The mechanics of Free Cash Flow to Equity for financial firms: the formula, how it differs from the standard FCFF version, a worked example, and the relationship between FCFE and dividends.
  2. Part 2: From FCFE to Intrinsic Value — Building the Bank DCF — Project FCFE forward using ROE and the retention ratio, discount at the cost of equity, add a terminal value, and arrive at intrinsic value per share — the complete bank DCF built step by step.
  3. Part 3: Normalizing Earnings for Insurance Companies — Why GAAP earnings mislead for insurers, how to strip catastrophe-year distortion using a multi-year average, how to normalize investment income using rolling yield and average float, and how to build normalized net income for a DCF model.
  4. Part 4: Risk and the Discount Rate — Why WACC does not work for financial firms, how to estimate cost of equity using CAPM, why we use the industry beta instead of a company’s own historical beta, and how the discount rate is the most powerful lever in a DCF model.
  5. Part 5: Putting It All Together — A complete FCFE-based DCF valuation from start to finish — combining normalized cash flows, the cost of equity discount rate, a terminal value, and a margin of safety calculation into one worked example.

Growth Investing

Not every great investment is a cheap stock. Some companies are worth paying a premium for because they’re growing so fast that today’s high price becomes tomorrow’s bargain. This series teaches you how to find those companies — and how to tell real growth from the kind that looks good but doesn’t hold up.

  1. Part 1: What Makes a Growth Stock — Growth investing vs. value investing, what characterizes a growth stock, why it carries more risk, and a preview of the six-gate screening framework.
  2. Part 2: The Six Gates — Screening for Quality Growth — The six hard gates every growth stock must pass: revenue and net income CAGR over five and ten years, debt-to-equity below 1.0, and no negative earnings in the last five years — plus why we prefer the 5-year CAGR to be higher than the 10-year.
  3. Part 3: Reading the Scorecard — The seven-gate scorecard in practice: how to read what a passing score actually reveals, the difference between clearing a gate narrowly versus comfortably, what the trailing P/E check is really measuring, and why a passing scorecard is the beginning of research, not the end.
  4. Part 4: When to Sell and Why — The four sell signals derived from the growth screen’s own criteria, the WATCH zone between green and red, and the independent wealth-destroyer check (ROIC vs. WACC) that can trigger even when every growth gate is green.

The Peter Lynch Approach

Peter Lynch ran one of the most successful investment funds in history. His method starts with a simple idea: ordinary investors have an edge over Wall Street because they encounter great companies in daily life before analysts do. This series explains his framework and how to apply it.

  1. Lynch Investing, Part 1: Invest in What You Know
  2. Lynch Investing, Part 2: The Two-Minute Story Test
  3. Lynch Investing, Part 3: The PEGY Ratio
  4. Lynch Investing, Part 4: Applying the Lynch Score
  5. Lynch Investing, Part 5: Knowing When to Sell — Series complete

The Bogle Method

John Bogle founded Vanguard and invented the index fund — one of the most important financial innovations of the 20th century. His approach is simple, low-cost, and backed by decades of evidence. This series explains what he believed and which ETFs (Exchange-Traded Funds — baskets of stocks you can buy with a single purchase, like buying a small slice of the entire market at once) put his method into practice.

  1. The Bogle Method, Part 1: Stop Trying to Beat the Market
  2. Part 2: The Three-Fund Portfolio
  3. Part 3: Putting It Together
  4. Part 4: Bogle vs. Active Stock Picking

Warren Buffett’s Advice

Warren Buffett has spent seven decades picking stocks — and in that time he’s shared, in remarkable detail, exactly how he does it. This series starts with his framework: the criteria he uses to find businesses worth owning, and the discipline he uses to decide what to pay. Along the way you’ll also see what he tells ordinary investors who don’t want to do this work themselves — and what he recommends instead.

  1. Part 1: What Buffett Actually Looks For
  2. Part 2: The ETFs He Recommends

Efficient Markets — A Random Walk

A century of academic research suggests that markets are far better at pricing stocks than most investors assume. This series takes that argument seriously — presenting the efficient market hypothesis honestly and on its own terms, then showing where disciplined active investing still finds its edge.

  1. Efficient Markets, Part 1: What Is a Random Walk?
  2. Efficient Markets, Part 2: Why Technical Analysis Fails
  3. Efficient Markets, Part 3: Why Fundamental Analysis Is Harder Than It Looks
  4. Efficient Markets, Part 4: The Efficient Market Hypothesis — Three Forms
  5. Efficient Markets, Part 5: The Case for Index Funds

Why Prices Move (And Value Doesn’t)

Stock prices move constantly — up or down by double digits in a single week — while the businesses beneath them barely change. This series explains what actually drives price movements: interest rates, inflation, the business cycle, and market psychology. The organizing question throughout is the same one every serious investor must answer: does this force change what a business is actually worth, or does it only change what someone is willing to pay for it today?

  1. Part 1: Meet Mr. Market — Benjamin Graham’s allegory for understanding why stock prices and business values diverge — and why that gap is the foundation of rational investing.
  2. Part 2: Interest Rates — The Price of Money
  3. Part 3: Inflation — Why a Dollar Tomorrow Isn’t a Dollar Today
  4. Part 4: The Business Cycle — Why markets price economic turning points months before the data confirms them, the difference between leading and lagging indicators, and why trying to trade the cycle is still a losing game for most investors.
  5. Part 5: Fear, Greed, and Herd Behavior — The human forces that amplify market swings far beyond what any rational reading of the economy would justify, and how the disciplined investor turns Mr. Market’s irrational moods into opportunity.
  6. Part 6: Putting It Together — The unified framework: what actually moves price vs. what moves value, and what the distinction means for how a long-term investor should think and act.

Reading Financial Statements Like an Investor

Most investors start with the income statement. That’s backwards. This series shows you how to read all three financial statements the way a business owner would — starting with cash flow, then earnings, then the balance sheet — so you can tell the difference between a company that looks profitable and one that actually is.

  1. Part 1: The Cash Flow Statement Comes First
  2. Part 2: What the Income Statement Really Shows — Why investors focus on operating income rather than net income, why EBIT tells you more than EBITDA, and why gross margin is the early warning sign that matters most.
  3. Part 3: The Balance Sheet — What Actually Matters
  4. Part 4: Notes and MD&A — Where the Real Information Hides
  5. Part 5: Post-ASC 842 — What Changed When Leases Moved On-Balance-Sheet
  6. Part 6: Putting It Together — A five-step reading protocol for any annual report: MD&A first, then cash flow, income statement, balance sheet, and key footnotes — each in the order that builds the clearest picture of a business.

Getting Started

The practical side of investing: employer retirement plans, brokerage accounts, and building a first portfolio. If you’re brand new to investing, start here before anything else.

  1. Part 1: The First Move — Your Employer’s Retirement Plan — Why the employer match in a 401(k) or 403(b) is the highest-return move most investors will ever see, and how to make sure you’re capturing all of it.
  2. Part 2: Opening a Brokerage Account — How to choose the right account type (IRA vs. taxable), which brokerage to use, what to buy first, and how to set up automatic contributions so investing happens without thinking about it.
  3. Part 3: Your First Portfolio — How to decide the right mix of stocks and bonds for where you are in life — and exactly what to do once all the pieces are in place.

New posts are added regularly. Start with the Introduction if you haven’t already — it explains what this blog is, who it’s for, and where everything is headed.

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