Read the method before you trust the number.
What a load line is, and why every business has one
In 1876 British law made merchant ships carry a mark on the hull, the line Samuel Plimsoll had fought for: load past it and the sea takes you. Intrinsic value is the same mark for a business. The price is the load, and the margin of safety is the distance to the line. This is how we draw it, what we assume, and what we refuse to guess.
The method
- How we compute intrinsic value, and where each method breaks — Two ways to end a forecast, a growth formula from Graham, and separate rails for banks, airlines and companies that lose money. Every dossier uses the same rules, written down here.
- Share count: the quiet way small caps take your money — A company can look cheap per share and still cost you through dilution. How we track the number of shares, and why a reverse split must not look like a buyback.
- What growth is the price assuming? Read the market’s homework first — Instead of guessing a value, ask what the current price already needs to be true. Then compare it with what the company has delivered.
- The Blind Zone: small caps that no analyst covers — Where mispricing has room to last, why nobody publishes on it, and the risks that come with the territory.
- Why we print “unknown” instead of a number — A figure we cannot verify is not a zero and not a guess. The rules we follow when data is missing, and what they cost us.
The 12 signals
Twelve things a value investor would check by hand in the accounts. Each one wins its full weight, half of it, or nothing, and the score is the share won over the signals we could check.
Glossary
The same cards that turn over on each dossier: why the figure matters, an example with numbers, and one line to keep.
Case files
- KO — A large, steady business with a full filing history: what a quiet dossier looks like, signal by signal.
- CVX — Energy through the cycle: growth, tax and margins taken from the whole cycle, not from the last year.
- JPM — A bank: valued on book value and return on equity, because debt is its raw material.
- FCEL — A small cap after a one-for-thirty reverse split: the share count, adjusted, tells the real story.