Behavioral Value Investor

[2026–2027] The Weekly Value Investing Seminar: Introduction

Gary Mishuris, CFA — Thu, 17 Sep 2026 16:13:47 GMT

Why I’m opening the classroom

For years I’ve taught the Value Investing Seminar at Babson College: a 20-week, book-driven course where we read the classics, answer tough questions, and debate them together. I have had numerous requests by those outside of Babson to join the seminar, but that is not feasible. My hope is that this online version of the seminar on Behavioral Value Investor, albeit somewhat different by its nature, opens the doors to many others who are seeking to progress on their investing journeys.

Last year’s first season went really well, so I am doing it again! If it’s for you, please join here, it’s free and there is no obligation to stay if your schedule changes. If you know someone who would benefit, please share this post with them.

Investing is hard. Why?

Long feedback loop between decisions and outcomes
Behavioral biases that can negatively impact our judgment
Temperament required to remain rational under pressure
Combination of art and science needed to achieve mastery

Some choose to learn investing purely from first principles. Others attempt to become expert investors by copying previous investing masters, such as Warren Buffett. Neither way is optimal.

I strongly believe that there is no best way to invest, but that there is a best way to invest for each of us. We each have different circumstances, different strengths and different weaknesses. Therefore we each need to build an approach that fits us.

However, we do not need to do it alone nor do we need to reinvent the wheel. We should learn from the master investors who came before us in seeking to craft our own investment process.

Some of these investing masters have passed away. Others are unlikely to be available to most of us for direct instruction. Fortunately, many of them have left a lengthy body of written work and their own investing experiences. That is where we should start our learning journey.

As we study each master investor, we need to take the following steps: understand, apply and customize.

1. Understand – You should be able to understand the key investing ideas in each book, not just quote them. Do you understand why the master investor used the approach that he or she did? What was the historical context or investing environment that they were in? How are the different parts of the investment process related to each other?

2. Apply – Investing is not a theoretical endeavor. The most successful investors in the world have not been professors merely armed with theories, but rather practitioners who understood theory and were able to successfully apply it in practice. If you don’t practice applying the knowledge that you glean as you read these investing books, you might be left with a deceptive feeling of mastery of the material where none exists.

3. Customize – You are not Warren Buffett, Benjamin Graham or Philip Fisher. Your strengths and weaknesses are different. Your investment operation and constraints might be different. So don’t run around trying to be the next Warren Buffett. Instead, become the strongest investor that you are capable of becoming by customizing what you learn. Use the insights in these books to build your own investment process, don’t just blindly copy theirs.

What you’ll get (Fridays, starting October 2, 2026)

The reading assignment with a brief introduction.
Discussion questions designed to help you learn.
Brief summary of my thoughts on the prior week’s reading.
Open comments to post your answers, learn from others, and see highlighted responses the following week.
While the nature and likely size of this open seminar is going to limit my ability to interact with each one of you, I will make an effort to engage with thoughtful answers or questions that you leave in each week’s comment section to deepen learning for everyone.
The seminar will run for 20 weeks, with breaks around holidays; I’ll announce dates in advance.

How to participate

Read the assignment
Write your answers or questions in the comments. Length is not important, quality of insight is.
Engage: respond to other answers with something additive.

Ground rules (so discussion stays high-signal)

Argue ideas, don’t attack people.
Even though this will be done online, treat others as if they were a respected colleague or fellow student that you are discussing ideas with in person.
Cite sources (e.g. book and page number).
No stock tips. Principles first; if you use an example, treat it as a case study.
No promotion - this is meant to be a place to learn, not to sell.
The more you participate by doing the complete reading and engaging fully in answering the questions, the more you will get out of the seminar.

Next steps

👉 Sign-up for the Friday seminar email (opt-in)

👉 Introduce yourself in the comments to this Substack post. At a minimum your first name and where you are from, but feel free to share anything else about yourself that’s relevant to your investing journey.

About the author

Gary Mishuris, CFA is the Managing Partner and Chief Investment Officer of Silver Ring Value Partners, an investment firm that seeks to apply its intrinsic value approach to safely compound capital over the long-term. He also teaches the Value Investing Seminar at the F.W. Olin Graduate School of Business.

The Mental Model Scorecard I Use in My Own Investing

Gary Mishuris, CFA — Fri, 11 Sep 2026 12:56:31 GMT

I have been investing professionally for over 25 years. In that time, I have accumulated a number of mental models. However, I found that I wasn’t using them consistently in my investment process.

So, I built an app with AI that lowers the friction and makes me actually use the hard-won investing lessons in my process. In the past this would have taken many months. Instead I was able to do this in under a week of part-time work using Claude Code.

I am really excited to share the Mental Model Scorecard with you. I have been using it consistently in my own investment process over the last few months, and think you will find it quite useful as well.

There is something here for everyone. If you are not a paid member yet, you can still start using the free portion of the app right away. And those of you who are paid members (thank you!) already have full access to the entire app. All you need is a browser, on your phone or on your computer, and you are ready to go.

Subscribe now

First, as with all the AI resources that I share with you, I want to frame where this can fit into your investment process. In my 5 Sources of Investing Edge article, I covered the stages of an investment process:

Each AI workflow that I release will be classified into one or more of the 5 investing process stages: Idea Generation, Research, Investment Decision, Portfolio Construction and Information Processing.

This system will let you quickly understand where an AI tool fits in and whether you want to use it in your own work. Without further ado, let’s get to today’s app.

First, why a scorecard rather than a checklist?

A checklist usually has questions that have a binary, yes or no, answer. A scorecard can have the flexibility to add more nuance to each question that properly captures what we are trying to measure.

Also, a checklist is usually structured so that each question gets a ‘yes’, or the checklist fails. Think of a pre-flight checklist that an airplane pilot does before takeoff.

A scorecard isn’t bound by this constraint. It allows you to get an answer that’s analog rather than binary. So instead of answering the question “Is this a good investment, yes or no?” it helps you answer the question “How good of an investment is this?”

Your scorecard will start with the 8 questions that I actually use in my own investing. These are of course not my only questions, but rather ones that experience has taught me I don’t ask consistently enough:

Is this an exceptionally good company?
Is this an extremely cheap security?
Is there an event that is likely to accelerate the timing of when the price/value gap will close?
Is this company becoming a better business, staying the same, or getting worse?
How consistent have recent results been with your thesis?
In which of the following categories do the problems facing the company fall: cyclical, structural, internal, balance sheet?
To what degree does the thesis rely on what has already been happening continuing vs. a change from the past?
What are the degrees of difficulty of getting this investing thesis right?

The default setting for you is that each question gets an equal weight in the total score, and the different responses for each question allocate that question’s points based on my own preferences. So if you are a free user and are not logged in, your screen will look like this:

You will be able to adjust the points assigned to each question, but not change the questions themselves. After the questions are completed, the app asks you to provide a succinct bear case. While any text will technically be allowed as satisfying this requirement, I encourage you to pause for a moment and to take this seriously as this is a great de-biasing opportunity.

Once you fill out the scorecard, the app will calculate the score for you.

Please don’t take this as advice. This is just the app mirroring your own opinion back to you. What is useful is that it forces you to answer these questions and confront what you think about a company.

The default scorecard is also intentionally tough. It is nearly impossible to get a perfect, 100%, score. Many good investments will have scores far lower than that. I have found the most useful features to be a) comparing scores among different investments and b) monitoring how my score for each company changes over time. We will get to this shortly.

In this short video, I show you how to use the free version to complete a scorecard.

If you are a paid member, use the email that you used to subscribe to the Substack to login, and you will receive a one-time login code. Once logged in, you will gain access to additional functionality:

Modify, delete and create questions and save your scorecard for future use
Save your results, with a ticker, to a real, commercial-grade database with daily backup
Export your data
Sort your companies by score or by changes in score if you have more than one entry
Compare any two scores and their components to see how your opinion has changed between those two dates
Chart the score for a given company over time

This video shows you how I use the additional features available to paid members.

I will occasionally add new functionality as warranted, so if you have suggestions, please let me know!

Now, let’s get to the four workflows that you can use this Mental Model Scorecard for in your own investment process:

Workflow #1:

Process Stage: 1b: Idea Triage

Who: Anyone

How:

In the early stages of considering a potential investing idea, fill out the scorecard. True, your answers will be far more approximate than if you fill it out for a company you have already fully researched. However, there should still be a reasonable amount of information in your answers.

You can approach this in one of two ways:

Set an absolute floor for ideas that you will move further into your research funnel. In my own use I found that ideas with a score below 30% tend to be not worth pursuing, but you can of course set your own threshold.
Rank your potential ideas by the score, and prioritize working on the highest-scoring ones

Workflow #2:

Process Stage: 3: Investment Decision

Who: Anyone

How:

Same as workflow #1, except now you are filling out the scorecard after you have done your full research on a promising investment candidate so your answers should be more informative. Set a minimum threshold and seriously consider not allowing ideas below it into your portfolio barring unusual circumstances that you can clearly articulate.

Workflow #3:

Process Stage: 4: Portfolio Construction

Who: Anyone

How:

Same as workflow #2, except now you are using the score as an input into your position sizing. For example, you can set a minimum score threshold for large positions. Or each of your position sizes can map to a score range that you deem appropriate assuming the investment also meets your other criteria. To be clear, I also consider valuation and a number of other factors in conjunction with the score in determining the position size.

Workflow #4:

Process Stage: 5: Information Processing

Who: Paid Subscribers

How:

Complete the scorecard for each of your holdings and/or watchlist companies. Repeat the process any time material new information comes out, such as an earnings report.

At a regular interval (e.g. monthly or quarterly), sort your scorecard journal by the change in the score. For each company with a decreased score:

Understand why the score dropped
Determine any necessary research steps
Decide if your value range estimate needs to be revised
Decide whether this merits eliminating or reducing the position

For each company with an increased score, perform similar steps while asking the opposite question of whether initiating or increasing a position is warranted.

I particularly love Workflow #4 because it embeds behavioral debiasing. By making filling out the scorecard quick and reducing friction, you get yourself to do something you should have been doing all along.

The benefit is that this process can help you catch deteriorating investments earlier than you would have otherwise. You also have a chance of catching good investments earlier. All with very little time spent and no technical know-how required.

THAT is the whole point of the paid side of the Behavioral Value Investor Substack. You don’t need a ton of technical jargon or fancy tools. What you need are useful workflows empowered by AI that you will actually use because they are easy to implement and don’t require you to become an AI expert while allowing you to benefit from the power of the technology.

Upgrade to paid

The best part is if you become an Annual subscriber, you get a 30-day full money-back guarantee. Try 1 workflow from beginning to end. If it falls short, email me within 30 days of your first Annual purchase and tell me which one you tried and where it came up short. I’ll refund your membership in full. Available once per member.1 I don’t want to hold you captive, I want you to be excited to be part of the community because you are deriving substantial benefits from what I am making and sharing with you.

Speaking of that, I have a number of exciting projects in the pipeline that I look forward to sharing with you in the coming months. If you have any suggestions for what I should build next, please leave a comment or send me a message. If you are a Free Subscriber and I end up implementing your suggestion, you will receive a complimentary month of the paid subscription.

Can I ask you for a favor? The Behavioral Value Investor’s relaunch around AI-enhanced workflows is recent, and many people don’t know about it. I would really appreciate it if you could restack this post to let others know and join us.

Until next time,

Gary

Disclaimer: Not financial advice, for educational purposes only. The Scorecard organizes your judgments; it does not recommend investments or determine position sizes.

About the author

Full refund terms.

Has AI Actually Improved Your Investing?

Gary Mishuris, CFA — Tue, 08 Sep 2026 19:27:29 GMT

If you are anything like many of my serious investor friends, you have dabbled with using AI. Yet you haven’t actually improved your investing.

Why I Am Making This Change

You probably do the occasional chat. Or a prompt to research something. Maybe you even use AI to help you build out a spreadsheet or a report.

But pause for a moment. How much has this actually improved your investing? As measured by what?

I have spent the last 2 years trying to answer that question for my own work. It is why I am relaunching the paid side of the Behavioral Value Investor Substack around repeatable investing workflows and practical process tools enhanced by AI.

Subscribe now

You are probably wondering if there is more that AI can do to help you invest better. And you suspect that others have been using it to far greater effect.

Well, I have good news for you: you are right on both counts.

I say good news because you aren’t really ‘behind.’ These are still the very, very early days of AI. Nobody has figured out how to use it perfectly. And many, if not most, of your peers use it as little as you do.

Think about what is stopping you from using AI in a better, more systematic way that will actually improve your investing.

While you are thinking, I can tell you what it was for me. I am 47. When I dove into figuring out how to use AI for investing ~ 2 years ago, I was 45. Let’s be honest, change, especially for an experienced investor, is hard. I was as set in my ways (which worked well enough) as you are.

So despite my 25 years of professional investing, my MIT Computer Science degree and my 7+ years of teaching investing to college and graduate students at Babson College, I was simply afraid to start doing things differently.

The fear isn’t irrational. AI is the fastest-changing technology I have ever seen. Every day some new tool is released. Someone puts out a video on something. A new model ‘drops’.

It actually is overwhelming.

If you go about it the wrong way, that is. And as a result, you aren’t reaping the meaningful benefits of AI for your investing that are there for you if you change your approach.

If you incorporate AI into your process the right way, it won’t be scary or overwhelming at all. It will feel so simple that you will wonder why you haven’t done this before.

Here is the thing: you don’t need to be up on the latest nuances of AI technology. Nor do you need to pay tens of thousands for fancy AI services that claim to simplify AI, but in their own, limiting way.

Instead, you need to think about 2 things:

Your investment process and areas where it can be improved
Workflows utilizing AI that can help you accomplish #1

That’s it. The tool can be very simple, but if it’s harnessed intentionally and plugged into your process correctly, it can make a big difference.

You don’t need me, or anyone else to do this. All the information is out there, and you can get it yourself for free. I know, because I spent the last 2 years immersing myself in this world, experimenting, learning (and building) new tools, and implementing new workflows.

What I can do for you, however, is make this process much faster and easier. I have already spent the time and have a good grasp of how to use AI effectively for investing.

This way you get to focus on what matters - improving your investing, rather than spending countless hours reinventing the wheel or ignoring the meaningful benefits that AI has to offer.

With that in mind, I am relaunching the paid Substack tier around AI for Serious Investors.

What Paid Membership Includes

My promise to you is simple: if you join you will be able to add at least 3 useful and easy-to-implement AI-enhanced workflows to your process that will make a difference in your investing.

Here are some of the things that you will get as part of your subscription:

The Toolkit: Workflows for recurring investing jobs, including finding special situations, identifying competitors for deeper research, reviewing management incentives, building a sourced bear case, and, for Annual and Founding members, running a PULSE triage on new ideas.
Downloads: Easy-to-use resources such as Claude Skills behind those workflows, with installation or operating instructions, known limitations, required checks, and last-tested dates.
The Mental Model Scorecard member app: Score a company on key questions, save the entry, repeat the exercise after earnings or another material event, and compare what changed. Then inform your portfolio construction process by tracking which investments have the highest/lowest score and which have a score that is increasing/decreasing the most.
Full library of 22 Investment Autopsy case studies: See what has worked and what has not for experienced investors, and lessons learned that you can use to improve your own approach.
Continuing additions: At least 1 new workflow, tool or deep-dive each month.
Annual and founding members also receive the Full PULSE template with Bloomberg codes (sold separately for $299) and recorded office hours twice a year answering your questions related to the investing process and AI.

One thing that is not changing is that there will still not be any investing recommendations or portfolio transparency anywhere on this Substack. So if you are looking for those, please don’t subscribe.

To use the full collection of Claude workflows, you will need your own paid Claude plan. The Full PULSE template with Bloomberg codes requires desktop Excel, the Bloomberg Excel add-in, and an active Bloomberg subscription. The Mental Model Scorecard requires neither.

The Limitations of AI

AI hallucinates. Occasionally it makes mistakes, both of commission and of omission. Sometimes it doesn’t fully follow your instructions.

This varies model to model, and even run to run. Unfortunately, it’s a structural limitation of the current state of the technology and there is nothing that I know of that can completely eliminate this.

With that in mind, why do I think these workflows are still very useful? A few reasons:

Much of the time there won’t be a material mistake
The times there is one, the output is still usually more than good enough for the intended purpose of the workflow
Frequently your alternative will be not doing anything at all for a particular process step, which would leave you worse off.

These limitations are also a reason why I am a big advocate of not outsourcing everything to AI, but rather of being selective in a way that has helped my process and that I will share with you.

Pricing and the Annual Guarantee

Pricing for new subscribers:

Annual Membership: $499/year ($41.58/month billed annually)
Monthly Membership: $99/month
Founding Membership: $999/year, voluntary support with the same access as Annual

I really believe that the Annual Membership is the one that will benefit you the most. Improving your process requires continuous engagement, and I think you will get the best results by learning and trying out new workflows with me over time.

At the same time, I get that spending $499 before you try out what I am offering and see if it works for you can feel like a lot. So I will make it simple.

If you subscribe as an Annual member and:

Try one of my recommended workflows end-to-end
Email me a request for a full refund telling me which workflow you ran and where it came up short

I will grant you the full refund regardless of your reasons (the first time that you request it) if you email within the first 30 days of your subscription.

If you are an existing paid subscriber, you should have received an update email with additional details. You already have full access to the Mental Model Scorecard, so I highly recommend you go check it out.

Subscribe now

How These Workflows Can Improve Your Investing

The benefit to you from all of this is that you can improve your investment process by making it both faster and more thorough. I have done countless hours of the hard work of figuring out what works well, and now you can benefit without having to put in that effort.

I obviously can’t promise you any outcomes. What I can tell you is that I will work hard to reduce the friction and share my hard-earned experience so that you actually use AI systematically in your investing, rather than just read about it in the news.

Let me make one thing clear. I am not making ‘stuff’ for you.

I am making tools and workflows for myself that I use in my own professional investing. So I am not sitting there trying to guess what you might want or what might be useful to you. I am giving you access to what I already tested and found to be useful to me. The odds are pretty good that many of these will also be helpful to you in your investing.

So let’s go back to where we started, to the question of how AI will help your investing, and as measured by what? My answer for you is:

You will spend less time on the tedious part of the investing process without reducing the quality of your work.
You will have the opportunity to look at more promising investing candidates.
You will have the tools to make better, more systematic decisions in places where your process was either absent or inconsistent.

What you get is the chance to bring your process to the level you have always felt it should be at. And if you, like me, believe that over the long-term results follow process, then the benefits are clear.

What Stays Free

The free tier will continue, and the whole library that was free will remain free. I want the freedom to write about whatever I think will help investors of all levels of experience here, without a schedule or purpose other than my own enjoyment and desire to give back.

Where to Start

Explore The Toolkit: see the current workflows and what each one is designed to do.
Ready to use them in your own process? Subscribe as an Annual member:

Join as an Annual Member

Run the free Mental Model Scorecard. Paid members can save, compare and analyze entries over time.

Disclaimer: Not financial advice, for educational purposes only. AI can make mistakes. Check its output and make your own investment decisions.

About the author

Member Downloads

Gary Mishuris, CFA — Tue, 08 Sep 2026 14:36:10 GMT

What 22 Investment Post-Mortems Taught Me

Gary Mishuris, CFA — Fri, 10 Jul 2026 03:39:22 GMT

I have spent 25 years watching intelligent, experienced investors lose money on investment theses that sounded reasonable at the time. A few of them were mine. I also observed others succeed in investments for reasons I didn’t understand.

That is what the Investment Autopsy series has been about. Every week I took one concluded investment thesis and asked the question I find more useful than any stock recommendation: what led to the success or failure of the investment thesis of an experienced investor, and how can we improve our own process as a result of what we learn?

I published Autopsy No. 22 last Thursday. With it, Season 1 is complete.

I am calling it a season on purpose. Each Autopsy is one data point. After 22 of them, the next case teaches less than the pattern already sitting in the ones I have written.

The same behavioral traps keep showing up. The same categories of mistakes recur, in businesses that otherwise have little in common. This is the moment to stop, look across all 22 at once, and pull out what they teach together. No single case can show that.

So, this week, in place of Autopsy No. 23, you are getting the synthesis: the patterns that repeat across all 22 post-mortems.

Two quick notes before we get to the patterns.

The archive stays where it is. All 22 cases remain in the paid library, and they are even more useful now than they were arriving one Thursday at a time. You can read them as a complete set, by failure type, when your own thesis starts to resemble one of them.

I am spending the rest of the summer reorganizing the paid library around the investing challenges many of you face, and building new tools to sit alongside it. Free essays continue as usual in the meantime.

The next new paid article comes out in August. Now, on to the patterns across the autopsy lessons.

Lessons across investment autopsies

Secular decline beats cheap valuation

The most common cause of death in the series: a statistically cheap stock facing a structural force pushing its revenue or economics down. It happened 8 times. In every case, the cheapness lost.

The mechanism repeats. Falling revenue hits a mostly fixed cost base, so profits fall faster than sales; Journal Register‘s profits halved on a 20% sales decline.

The market then correctly re-rates the company as a declining earnings stream, so the multiple compresses on top of the falling earnings; Lexmark fell another 44% from what was already its cheapest valuation ever.

Management responds with reasonable-sounding countermeasures, and they prove insufficient. If debt is present, it sets the deadline.

Why do investors this experienced keep making this mistake? Because value investors find ideas by screening for cheapness, and cheap screens are full of secularly challenged companies.

They are cheap for a reason. The behavioral pull is anchoring: a decade of strong historical margins makes the current weakness look like a deviation that will mean-revert. Mean reversion is a real force when the problem is cyclical. When it is secular, the mean itself is moving down.

Where it showed up:

Staples (No. 7): the write-up named Amazon and channel shift as risks, then valued the company as if neither would bind. Both did.

Kodak (No. 9): the short. Same force, opposite direction: the bet was that the visible decline would continue, and it did.

Blockbuster (No. 16): everyone was negative on it. Everyone was right. Contrarianism alone is not an edge.

Lexmark (No. 19): the other short that worked, for the same reason the longs kept failing.

Hain Celestial (No. 21): organic food went mainstream and competitive; the category matured out from under the thesis.

DXC Technology (No. 22): legacy IT contracts running off, disclosed in the filings all along.

Journal Register (No. 12) and Bed Bath & Beyond (No. 14, the second act) belong here too; debt finished what the decline started, and they appear again below.

The process check: classify the headwind before you value anything: cyclical, secular, or internal. If cyclical, the work is survival analysis and mid-cycle valuation; that is how Builders FirstSource became the biggest winner of the series. If secular, the burden of proof flips: demand demonstrated stabilization, a catalyst, or a healthy segment insulated from the decline. If secular and levered, pass.

Evidence beats potential, in both directions

This lesson separates the winners from the losers more cleanly than any other single factor. Almost every failed long bet on a future that nothing in the numbers yet supported:

eDiets (No. 10): needed broken subscriber economics fixed. The fix never came; the loss was near total.

Sleep Number (No. 20): needed sales growth to convert into profit growth. Sales grew 10% a year; operating income grew 1%.

Advance Auto Parts (No. 4): my own thesis. It needed a margin gap to O’Reilly and AutoZone to close before there was any evidence of closing. The gap widened. My exit was profitable, and it was luck.

Sprint Nextel (No. 18): mine as well, with Bill Miller for company. Needed announced merger synergies to show up. What showed up was a $30 billion impairment.

Omnicare (No. 5): fundamentals stalled under a revolving door of CEOs; a premium CVS takeout rescued the result.

The successful theses were based on change that was already observable. Gartner (No. 13): the product shift and resilient renewal rates were in the reported numbers when Ubben presented. TJX (No. 17): the returning CEO had already run the same business well once, and did it again. Be careful if your thesis is based on expecting a future that is different from what has actually been happening to the company thus far.

McKesson (No. 15) makes this a 2-way rule. I passed on it over a theoretical worry, undifferentiated distributors competing away profits, that had no real-world evidence behind it. It never materialized. Talking yourself out of a good investment with an untested fear is the same error as talking yourself into a bad one with an untested hope, run in reverse.

The process check: separate what is already happening from what must change for the thesis to work. Have a very high bar for betting on future developments that aren’t yet supported by current fundamentals.

Debt plus fixed costs plus falling sales is lethal

The combination kills, not any single element. A company can be undervalued on correct mid-cycle earnings and still hand shareholders a zero, because the trough arrives before the mid-cycle does and creditors own the company by the time the value shows up.

Lear (No. 1): the cleanest example. The whole normalized-EPS debate became irrelevant once Chapter 11 wiped out the equity.

Journal Register (No. 12): the same math, faster. A fast exit contained the damage.

Blockbuster (No. 16): debt plus a shrinking business, with the substitutes already visible.

Bed Bath & Beyond (No. 14): the self-inflicted version. Borrowing heavily to buy back shares while fundamentals decline assembles the lethal combination voluntarily.

Hain Celestial (No. 21): debt removed the time the turnaround needed.

The counterexample earns its place. Builders FirstSource (No. 8) carried real distress risk into a housing depression and returned 46% a year for 5 years. Robotti did explicit survival math: cash on hand, burn rate, dilution scenarios, and whether the shareholder base could fund a raise. He sized the path, not just the destination.

The process check: before valuing the destination, ask whether the balance sheet survives the worst plausible 2 to 3 years. If the thesis needs years and the balance sheet grants quarters, the valuation work may be moot.

Approximately right on a few variables

Almost every winner was wrong on its point forecasts. Wyden’s Ferrari (No. 2) EBIT estimate missed by 40%. Tarasoff’s Amazon (No. 6) e-commerce penetration guess came in high, and his retail margins landed at the low end. Robotti‘s 10% EBITDA margin never arrived.

None of it mattered, because each thesis was right on the direction and rough magnitude of the 1 to 3 variables that actually controlled value.

American Tower (No. 11) is the purest version: one variable (tenants per tower), one driver (cellular data demand), one consequence (profits growing off a near-fixed cost base). No 500-line model. McKesson and TJX share the shape: a handful of levers, each one checkable.

I supplied the counterexample myself. My Sprint model was detailed, precise, and wrong, and its precision is what let me rationalize away the subscriber losses that were breaking the thesis. Complexity gave comfort. It did not reduce risk.

The process check: name the 2 or 3 key variables that drive the value and hold an approximate view on each supported by the evidence. If the thesis needs precision, pass.

Selling is a separate skill from buying

The series shows this from every angle, and the spread of outcomes is enormous.

Holding a winner: up 42% in 9 months on Ferrari (No. 2), Wyden re-underwrote the thesis, saw further large upside, and held. That one decision captured most of the eventual return.

Selling a winner too early: Robotti (No. 8) sold half of what became a 50-bagger between $4 and $7, anchored to his $2 entry. Ubben exited Gartner (No. 13) in early 2012; it compounded at 25% a year for the next decade.

Selling a loser fast: Rogers exited Journal Register (No. 12) within weeks of presenting it, converting a would-be wipeout into a merely bad outcome. Welling’s firm escaped Hain (No. 21) in 2021, before the 97% decline.

Refusing to sell: Pzena held more than half of his Lear (No. 1) position nearly to zero, sustained by a belief the bankruptcy process falsified.

Exiting when the insight is exhausted: American Tower (No. 11) lagged the market from 2010 on, once the tenancy story was priced. The business stayed excellent. The mispricing was gone.

The rule that unifies all of these: update the value estimate on new information, and anchor to nothing else. Entry price is a sunk cost.

The process check: Is your current value estimate based on your original facts or the latest version? If the former, you must rethink your thesis, update your value and act accordingly.

How to use the library from here

The 22 cases are indexed below. My suggestion: read them by symptom.

When one of your own holdings starts producing the same arguments you have seen in these cases, when you catch yourself extending the timeline or ignoring the balance sheet, go find the case that matches and see how it ended.

That is what a post-mortem library is for. You study the failure while you still have time to act on your own investment to avoid it.

Thank you for reading this season, and to the paid members especially, for supporting work that takes the slow route. If one of the 22 cases stayed with you, or if there is a research problem you want the paid tier to do more work on, leave a comment or send me a message. I read every one.

I am working on finishing some exciting new tools and resources that I plan to share with you starting in August. Until then, here is to better investment process, not more opinions.

A Request

Help grow our community of thoughtful investors by restacking this article.

The index: the cases by pattern

Most cases teach more than one pattern; each appears under every pattern it fits.

Secular decline beats cheap valuation: Staples (No. 7), Kodak (No. 9), Journal Register (No. 12), Bed Bath & Beyond (No. 14), Blockbuster (No. 16), Lexmark (No. 19), Hain Celestial (No. 21), DXC Technology (No. 22)

Evidence beats potential, in both directions: Nestlé (No. 3), Advance Auto Parts (No. 4), Omnicare (No. 5), eDiets (No. 10), Gartner (No. 13), McKesson (No. 15), TJX (No. 17), Sprint Nextel (No. 18), Sleep Number (No. 20)

Debt plus fixed costs plus falling sales: Lear (No. 1), Builders FirstSource (No. 8, the survivor), Journal Register (No. 12), Bed Bath & Beyond (No. 14), Blockbuster (No. 16), Hain Celestial (No. 21)

Approximately right on a few variables: Ferrari (No. 2), Amazon (No. 6), Builders FirstSource (No. 8), American Tower (No. 11), McKesson (No. 15), TJX (No. 17), and Sprint Nextel (No. 18, the counterexample)

Selling is a separate skill from buying: Lear (No. 1), Ferrari (No. 2), Builders FirstSource (No. 8), American Tower (No. 11), Journal Register (No. 12), Gartner (No. 13), Hain Celestial (No. 21)

Management and culture change take years: Advance Auto Parts (No. 4), Omnicare (No. 5), Gartner (No. 13), Bed Bath & Beyond (No. 14), TJX (No. 17), DXC Technology (No. 22)

Large acquisitions carry bad base rates: Advance Auto Parts (No. 4), Omnicare (No. 5), Builders FirstSource (No. 8, the disciplined exception), Sprint Nextel (No. 18)

History-based normalization fails when the business has changed: Lear (No. 1), Nestlé (No. 3), Lexmark (No. 19)

A risk listed is not a risk weighted: Staples (No. 7), Blockbuster (No. 16), Hain Celestial (No. 21)

Unit economics govern everything above them: eDiets (No. 10), American Tower (No. 11)

Well-followed companies demand a differentiated view: Nestlé (No. 3), Blockbuster (No. 16)

Appendix: the 22 cases in order

Tickers as covered in each case; several have since been acquired or delisted.

About the author

10-Minute Investment Autopsy No. 22: DXC Technology (DXC)

Gary Mishuris, CFA — Thu, 02 Jul 2026 12:17:06 GMT

If you haven’t read the guide to the 10-Minute Investment Autopsy series, you can find it here.

The Original Thesis

Who: Alexander Roepers

When: January 2019

What: DXC Technology (ticker: DXC)

The Thesis:

DXC was formed in April 2017 when Computer Sciences Corp merged with the enterprise services arm of Hewlett Packard Enterprise.
CEO, Mike Lawrie, has an excellent track record with proven shareholder orientation
Alexander believes the CEO is doing the right things operationally
Management has flexibility to return the company to growth
The stock trades at a 13% FCF yield based on Alexander’s 2020 estimates, leaving plenty of upside with good execution

These are the highlights of DXC’s then-recent financials up to the point when Alexander was presenting his thesis:

This is the stock chart up to the time when Alexander presented his thesis:

Pause here. Think through the thesis and the facts and decide what you agree with, what you disagree with and whether you would invest based on the information available.

What Happened (Just the Facts)

Between January 2019 and now DXC shareholders saw a -86% total return compared to +211% for the S&P 500

There is a lot more to the case:

The Autopsy - the reasons for what happened
The Lessons that you can apply to your own investing
Discussion Questions for you to think about and discuss with other thoughtful investors in the weekly case thread

How a 100+ Bagger Went Bankrupt: The Story of Sleep Number

Gary Mishuris, CFA — Mon, 29 Jun 2026 12:16:43 GMT

On December 19, 2008, Sleep Number’s stock price bottomed at 19c per share. The company was on the precipice of bankruptcy. Debt was high, cash was scarce, and the auditors attached a going-concern qualification to their opinion.

On March 19^th, 2021, the company’s stock was trading at $143.83 per share. That’s a return of 750x+ over 12 years.

I covered the story of how Shelly Ibach, who became CEO in 2012, helped turn the business Bill McLaughlin had pulled back from the brink into a massive winner in Investment Autopsy #20. In this article, I dig into how Sleep Number came to the brink of failure again, only a few years after that March 2021 high.

Only this time, it didn’t stop at the brink. The company filed for bankruptcy on June 12, 2026, and its stock now trades at just 3c per share:

The company’s fall, surprisingly, started with blockbuster growth. In 2020, in the midst of the COVID pandemic, sales growth came in at 9%. In 2021, it accelerated to 17%.

Store count expanded from 611 at the beginning of 2020 to 648 by the end of 2021 and then to 670 by the end of 2022. Comparable sales growth was 6% in 2020 and 17% in 2021. Profit margins expanded by around 2% over this two-year period.

How could such great results lead to the company’s downfall?

Greek tragedies follow a certain pattern. A key component is that the hero’s hubris carries the seeds of their eventual downfall. And a management team that had presided over an amazing turnaround that had resulted in a 100+ bagger was particularly vulnerable to hubris.

Management interpreted this inflection in demand not as a purely cyclical phenomenon, but rather as a deserved validation of its long-term strategy. For example, on the Q4 2020 earnings call, the CEO said:

Consumer trends that we have long anticipated were accelerated by the global pandemic in the past year, resulting in three structural shifts.
First, consumers are prioritizing well-being, their own and that of their families, and they now better understand the strong link between sleep and overall health and wellness.
Second, consumers are adopting digital products and services at a much higher rate, and they are increasingly relying on digital health solutions.
And third, consumers have a heightened preference for brands that are characterized by authentic purpose and human empathy. Each of these shifts is enduring, driving permanent changes in consumer purchase behavior.
With our strategic investment in sleep science-based innovation, digital technologies, and brand accelerators, we are positioned to continue taking market share and delivering superior stakeholder value in this transformed environment.

In other words, management didn’t perceive this acceleration in sales growth as being caused by a cyclical pull-forward in demand. Management’s language suggests they treated the pandemic demand surge as confirmation of their strategy, rather than as a warning that some demand had been pulled forward.

Assignment of credit was not the only implication of interpreting this new level of demand as structural. It also drove management’s views on investing and capital allocation.

Speaking of capital allocation, what would you do if you were the CEO of a company and believed:

The business was structurally improving due to management’s brilliant strategy
The acceleration in demand was sustainable
Management’s prior actions had already led to massive stock price appreciation over the prior decade

You guessed it, you might be tempted to buy back a heck of a lot of shares. Not as an empty signal of confidence, but as a reflection of your genuine belief that the shares were a lot more valuable than the market was giving them credit for being.

Subscribe now

That’s exactly what Sleep Number management did:

The company repurchased over $1.5B in shares between 2012 and 2022
This included more than $630M between Q4 2020 and Q1 2022 at an average price of around $90 per share.

You might think that the 2020 and 2021 share buybacks were just business as usual. After all, as you can see from the blue bars in the chart above, they have been buying back shares for a while.

The leverage problem did not begin in 2020. Debt had already risen sharply before COVID. The 2020-2021 period was the final and most damaging phase, when management doubled down near the top of the cycle.

This might have been fine had management’s assessment of the facts been accurate. However, reality had other plans…

In 2022 comparable sales declined 6%. In 2023, they declined 12%. And in 2024 they declined another 10%.

Over that time frame, EBITDA margins got cut in half, from 12.7% in 2021 to 6% in 2024.

Ominously, the company had a cumulative negative free cash flow of around $100m over that period. Net Debt to EBITDA spiked to nearly 5x.

What happened?

Turns out, the jump in demand in 2020-2021 wasn’t mainly consumer recognition of management’s superior strategy and company positioning. It was mostly an old-fashioned cyclical demand pull-forward.

COVID naturally boosted consumer demand for houses. After all, if you are surrounded by people any number of whom can have a deadly virus, what could be more rational than to want to get away from them into a house of your own?

As you can see, both existing and new home sales spiked in 2021-2022 and then sharply declined thereafter:

Of course, it didn’t help that ultra-low bond rates, and by extension mortgage rates, normalized upwards shortly after the COVID pandemic:

The underlying rise in inflation, in addition to contributing to higher mortgage rates, also reduced consumer disposable income and their ability to purchase and finance high-ticket discretionary items:

A large share of Sleep Number’s sales relied on promotional financing through Synchrony. Higher rates not only hurt consumers but also raised the cost of subsidized financing.

Finally, the microchip shortage in 2022 disproportionately hurt the company given that it used them in its smart beds whereas competitors selling plain old mattresses did not.

Management was quick to blame external forces for the carnage.

CEO, Q1 2022 Earnings Call:

The start of the war in Ukraine in late February, combined with a sharp increase in gas prices and broad-based inflationary pressures, affected consumer shopping behavior in March, including demand for our smart beds.

CEO, Q2 2022 Earnings Call:

Economic conditions for consumers have deteriorated throughout the year. The annual inflation rate accelerated to more than 9% in June, the highest level since 1981, and nearly half of U.S. consumers now say that inflation is eroding their standard of living.
Consumer sentiment plummeted to record low levels in May and June, with declines across all demographic segments. Correspondingly, our demand for the second quarter declined 12% versus the prior year.

CEO, Q4 2023 Earnings Call:

Low consumer sentiment, slower new home purchases, and elevated interest rates continued to pressure demand for our category. Additionally, consumer purchasing power continues its steady downward trend.
We estimate that mattress units in 2023 were below 2015 levels and down more than 25% from their 2020 peak.

Gone were the days when management talked about a permanent structural shift in consumer demand for their product due to their innovation and branding.

Not everyone was so forgiving. In late 2023 an activist investor, Stadium Capital Management, got involved. After their cooperation agreement expired in 2024, they issued two scathing letters detailing their perception of management and board misdeeds. They were also instrumental in pushing out the CEO who presided over the rise and fall of company’s fortunes.

They made their opinion of the board clear in their November 2024 letter:

While shareholders cannot trust the current Board to hire Sleep Number’s next CEO, we also believe that shareholders cannot trust this Board, which is still populated with many long-tenured directors who presided over a truly colossal destruction of shareholder value, to oversee the crucial capital allocation decisions facing the Company.
A meaningfully reconstituted Board will be better positioned to identify a great CEO, create the best incentives for that CEO and instill long overdue accountability into Sleep Number’s corporate culture, all of which would help unlock the tremendous value that exists within this Company. It is well past time to put an end to this relentless and extraordinary value destruction, and fix Sleep Number’s leadership and governance.

They got their wish for a new CEO, but unfortunately it was too late. In March 2025 the board named a new CEO, Linda Findley, who attempted to turn things around.

Linda did cut stores and costs, but she inherited a balance sheet with very little room for another demand shock. By then, the question was less whether the business could be improved and more whether creditors would give it enough time.

Saddled with a pile of debt and depressed demand, she was unable to boost profits sufficiently to avoid tripping covenants and appease the banks supporting the company via the revolver.

On the Q4 2025 Earnings Call she summarized the situation:

Finally, let’s talk about liquidity and capital structure. It isn’t news to anyone that we need to fix our capital structure. I knew that when I joined the business less than a year ago, and it remains our top priority.
Three things hit us particularly hard in the end of 2025 and beginning of 2026. The industry-wide softness we already spoke about our work to clear out inventory as we roll out the new product line, and our continued careful management of marketing spend as we lap a very high inefficient spend of Q1 last year.
This puts pressure on our liquidity, and we are implementing a plan to address this. As part of that plan, we hired Guggenheim Securities to evaluate the inbound interest we have received and advise on other opportunities to refinance our credit facility as we shape Sleep Number back into a profitable, growing company.

Unfortunately, on June 12, 2026, the company filed for Chapter 11 bankruptcy listing $642M in assets against $1.3B in liabilities including $672M in debt.

The Lessons

When demand changes rapidly, it’s important to seriously consider the degree to which the reasons are cyclical, and therefore temporary. Shelly’s public comments suggest she viewed the rapid spike in demand in 2020 and 2021 largely as validation of the company’s strategy. While there might have been some benefit from that strategy on the improving results, she would have been wise to consider that her competitors were seeing similar rapidly improving results, suggesting that a large portion of what was going on was temporary.
Levering up the balance sheet is always a risky strategy. It is particularly so when the business is cyclical and you are near the top of the cycle. Of course, nobody tells you where the top is in real time. However, if business is going really well, your stock is flying high and there is not a cloud on the horizon, it’s dangerous to increase financial leverage. It is especially baffling that this board of directors, many of whom presided over the company’s near-death experience in 2008-2009, fell into this trap. Perhaps they thought that if they survived it once they could do so again. Unfortunately, every cycle is different and if you introduce financial fragility into the company, it might not come out on the other side of the cycle.
It is very hard to combine greatness with humility. In some ways, perhaps it doesn’t make sense to be too humble if you have been doing a great job as the management team over a long period of time. However, the best management teams can combine deserved pride in their success with a healthy measure of paranoia that prevents them from resting on their laurels.
The final lesson is the simplest one of all, but perhaps the most profound for investors. Any series of numbers multiplied by 0 is still equal to… 0. It doesn’t matter what your returns were, if you kill the company all the shareholders get wiped out.

If this case study was useful, please restack it so another serious investor can learn from it.

Paid subscribers to Behavioral Value Investor get regular case studies, investing frameworks, and AI tools for improving their research process. Please consider subscribing.

Disclaimer: Not financial advice, for educational purposes only.

About the author

10-Minute Investment Autopsy No. 21: Hain Celestial (HAIN)

Gary Mishuris, CFA — Thu, 25 Jun 2026 12:45:55 GMT

If you haven’t read the guide to the 10-Minute Investment Autopsy series, you can find it here.

The Original Thesis

Who: Glenn Welling

When: August 2019

What: Hain Celestial (ticker: HAIN)

The Thesis:

One of the pioneers of natural/organic food industry built through acquisition
Rollup strategy misfired due to lack of integration and innovation
Organic food business has become more mainstream and more competitive and the company wasn’t able to maintain its competitive advantage
Saw a lot of unrealized potential, launched a campaign and settled with the company in Q3 2017 to change the majority of the board
Brought in new directors with relevant experience and replaced the long-time CEO with the former Chief Commercial Officer at Pinnacle Foods which had gone through a similar turnaround
New CEO replaced most of his leadership team
The company’s new strategy is to simplify its business by focusing on advantaged categories, improve operations, expand margins/cash flow and restart sales growth
Some of these initiatives are starting to bear fruit, with EBITDA margins increasing for 3 straight quarters and are up 400bps from 6% to 10%
Glenn expects margins to continue to increase to the 13% to 16% range
A major component of management’s incentive plan is an equity grant that doesn’t vest unless the stock produces a 3-year annualized total return of 15%+
The implied $40/share price is consistent with where Glenn sees the value if management achieves 3%-6% organic sales growth and its margin targets

These are the highlights of Hain Celestial’s then-recent financials up to the point when Glenn was presenting his thesis:

This is the stock chart up to the time when Glenn presented his thesis:

Pause here. Think through the thesis and the facts and decide what you agree with, what you disagree with and whether you would invest based on the information available.

What Happened (Just the Facts)

Between August 2019 and now HAIN shareholders were nearly wiped out (-97% total return) vs. +183% for the S&P 500

There is a lot more to the case:

The Autopsy - the reasons for what happened
The Lessons that you can apply to your own investing
Discussion Questions for you to think about and discuss with other thoughtful investors in the weekly case thread

10-Minute Investment Autopsy No. 20: Sleep Number (SNBR)

Gary Mishuris, CFA — Fri, 19 Jun 2026 01:21:36 GMT

If you haven’t read the guide to the 10-Minute Investment Autopsy series, you can find it here.

The Original Thesis

Who: Jim Larkins

When: September 2013

What: Sleep Number (ticker: SNBR)

The Thesis:

Unique product concept that addresses a key sleep-related problem, which is partners who don’t like the same kind of mattress
Vertically integrated model with manufacturing and distribution via their own stores providing superior margins
Healthy cash flows that can be used to self-fund growth
Temporary execution problems around media advertising
Sleep Number mattresses address a premium segment of the market which is taking share and therefore growing faster than the industry
Additional store potential provides another avenue for growth, leading to 5%-6% square footage growth
Potential for new product rollouts
Thinks the company can grow profits at 20% per year for the next 2 years, then low-teens after that
Shares are inexpensive at 15x Jim’s 2015 estimate of $2 in EPS and he thinks that the multiple should expand to 17x-18x

These are the highlights of Sleep Number’s then-recent financials up to the point when Jim was presenting his thesis:

This is the stock chart up to the time when Jim presented his thesis:

Pause here. Think through the thesis and the facts and decide what you agree with, what you disagree with and whether you would invest based on the information available.

What Happened (Just the Facts)

Over the 5 years following Jim’s 2013 interview, Sleep Number’s stock produced an annualized total return of 12% vs. 14% for the S&P 500

There is a lot more to the case:

The Autopsy - the reasons for what happened
The Lessons that you can apply to your own investing
Discussion Questions for you to think about and discuss with other thoughtful investors in the weekly case thread

AI for Serious Investors #3: Company Overview Deck Claude Skill

Gary Mishuris, CFA — Wed, 17 Jun 2026 14:10:45 GMT

In AI for Serious Investors No. 1, we covered what Claude Skills are, how to install them, and you got the Special Situation Screener Skill to improve your idea generation. In this article I am going to share a simple but surprisingly useful Skill that builds out a structured Company Overview PDF deck in minutes.

Quick Note: As a way of saying ‘Thank you!’ to all of you, I am making this article and the Skill download 100% free.

In my 5 Sources of Investing Edge article, I covered the stages of an investment process:

Each AI resource that I release will be classified into one or more of the 5 investing process stages: Idea Generation, Research, Investment Decision, Portfolio Construction and Information Processing.

This system will let you quickly understand where an AI tool fits in and whether you want to use it in your own work. Without further ado, let’s get to today’s Skill.

Company Deck Skill

Investing Process Stage: Early Research / Late Idea Generation

Technical Savvy Required: Low

Pre-requisites: Claude subscription, works in web browser

Expected Time: about 15 minutes per run

This Skill creates a structured company overview deck in PDF format. It’s a great way to quickly get to know a company that you are thinking about researching further.

You can use it at the tail-end of the Idea Generation stage to decide if a seemingly promising candidate is worth further work. Or this can be the jumping-off point for a stock you already decided to research and now want to build your plan.

It follows the following structure:

Slide 1: What does the company do? What goods/services the company sells, to whom, and how it gets paid.

Slides 2–4: Company history - How the business evolved over time. Acquisitions / divestitures made. When and why management changed.

Slide 5: Industry & Porter’s 5 Forces - summary. Describes the company’s primary industry and summarizes the Porter 5 Forces analysis.

Slides 6–10: Assessment of each Force and how it has changed over the last few years.

Slide 11: Competitive Advantage Does the company have it? What is it? How big/small? How has it changed over the last few years?

Slide 12: Management Incentives (e.g., proxy-statement compensation section), how long they have been in place, how much stock they own.

Slide 13: Balance Sheet How levered is it?

Slide 14: Biggest Risks The biggest risks to the company for an investor who would own the stock for at least 5 years.

Slide 15: Next Steps - The research path recommended for a long-term investor to verify these conclusions, deepen understanding, and gain mastery sufficient for a thorough quantitative and qualitative understanding of the business.

The best part?

A. The Skill works surprisingly well and consistently in our own testing

B. You should be able to easily modify the structure of the slide deck to whatever fits your own process

Download the Company Overview Skill here. Use this 100% off Discount Code to get it free, no payment info required once you enter the code near the bottom and hit ‘Apply’:

Discount Code: YZMDK4NQ

Conclusion

I have a full pipeline of other AI-related tools that I am excited to share with you in future articles, so stay tuned!

Two disclaimers:

AI can (and probably will) make mistakes. I tested these Skills and use them myself but sometimes a) a run may abort due to technical issues or b) some of the info can be off. I have found these cases to be rare and an acceptable cost of using tools that most of the time work well. You will have to make that tradeoff decision yourself.
This is not investment advice; I am just sharing my work with you and strongly encourage you to both check any AI tool you use and always make your own investing decisions.

Do you have an idea for what investing-related AI tool I should build next? Please leave a comment or send me a DM. If I end up building your idea, you will get it free even if you are not a paid subscriber.

A Request

Help grow our community of thoughtful investors by restacking this article to help it reach more serious investors like you.

About the author

10-Minute Investment Autopsy No. 19: Lexmark (LXK)

Gary Mishuris, CFA — Fri, 12 Jun 2026 01:52:00 GMT

If you haven’t read the guide to the 10-Minute Investment Autopsy series, you can find it here.

The Original Thesis

Who: Ricky Sandler

When: August 2006

What: Lexmark (ticker: LXK) as a short

The Thesis:

The printer business used to be great, but it’s not anymore.
Epson, Canon, Samsung, Xerox and other competitors have expanded in the business.
While this is still technically a razor/razor-blade business, competitive intensity has caused the upfront loss on the printer to increase to -20% to -40% gross margins.
The printer replacement cycle has shortened to 2 years, decreasing the value of the consumables profit stream over the lifetime of a customer.
Growth in private-label refilled ink cartridges is also a negative for the industry.
Lexmark’s reliance on Dell as their largest, albeit white-label, customer is a problem as Lexmark gets beat up on price and earns poor economics on the relationship.
Due to underinvestment in R&D, the company is poorly positioned for color and photo printing, where the industry is moving.
The stock trades at about 14x this year’s earnings and 16x next year’s, which is a premium to many growing businesses at a time when its business is disintegrating.

These are the highlights of Lexmark’s then-recent financials up to the point when Ricky was presenting his thesis:

This is the stock chart up to the time when Ricky presented his thesis:

Pause here. Think through the thesis and the facts and decide what you agree with, what you disagree with and whether you would invest based on the information available.

What Happened (Just the Facts)

Over the 5 years following Ricky’s 2006 interview, Lexmark’s stock was down 45% vs. +1% for the market

There is a lot more to the case:

The Autopsy - the reasons for what happened
The Lessons that you can apply to your own investing
Discussion Questions for you to think about and discuss with other thoughtful investors in the weekly case thread

The 7 Questions That Changed My Investing

Gary Mishuris, CFA — Wed, 10 Jun 2026 13:52:16 GMT

I am a little embarrassed to admit, but for the first part of my 25-year investing career you could have probably summarized my approach as buying good-enough companies at cheap-enough prices. It’s not a terrible approach, but it’s both too simplistic and has occasionally gotten me into trouble.

That trouble led to introspection. I care deeply about delivering excellent outcomes for my partners who trusted me with their capital. I also have most of my family’s net worth invested in Silver Ring Value Partners.

So, unlike an environment at a big mutual fund firm where sometimes incentives cause financial success to be driven by marketing, I had a lot of evolutionary pressure to improve.

Below I am sharing my hard-won lessons with you. This series of questions acts as a powerful filter that helps me separate the outstanding opportunities from the stuff that I might have otherwise talked myself into.

A few things before we dive in:

These are meant for experienced investors who already understand the basics. In the interest of brevity, I am not going to dive into topics like how to assess company quality, as this would make this a book rather than an article.
You can use this as a checklist, as a source of one-off questions to add to your process or as a mental model scorecard with your own weights attached to each answer.
Some of these questions are targeted at existing holdings, but you can still apply them to potential new investments that you are considering with a slight reframe.

1. Is this an exceptionally good company?

A logical question is what does ‘exceptionally good’ mean? We could leave it at ‘you know it when you see it.’ However, it’s worth talking about how tight this filter should be in order to be useful.

First, don’t let the perfect be the enemy of the excellent. Every company has flaws or some potential risks. If you set the bar at having none of those, you will have too few candidates, if any.

On the other hand, you can set the aperture to be too wide. If we say that there are on the order of 10,000 publicly traded companies and then define ‘exceptionally good’ as the top 10%, we are going to end up with 1,000 companies. That’s sure to allow some decent but not exceptional candidates.

My experience tells me that the right number is probably a few hundred companies globally. Some might still find that too loose or too tight. However, the combination of good business and competent and motivated management is rare.

I would rather err towards the slightly too tight than too loose for this criterion.

2. Is this an extremely cheap security?

Same issue as above: what does ‘extremely cheap’ mean? Valuation is usually best judged in the context of what you are valuing. What is a cheap valuation statistic for an exceptional high-growth company is expensive for a declining business.

However, since we want this question to work for us independently, we are going to take a stab and establish some absolute parameters. For me, ‘extremely cheap’ usually maps to one or more of:

Market is implying a severe long-term decline in profits
Market is implying a conservative liquidation value well above current price
If the company just earns what it has averaged over the last economic cycle and sends its owners those earnings as dividends, the owners stand to get a strong double-digit annualized rate of return

Switching from the general to some specific examples.

11x EPS is not extremely cheap. 6x EPS is.
A 7% EV Cap Rate (NOPAT/Enterprise Value) is not extremely cheap. 11% is.
A stock trading at 0.8x Book is not extremely cheap. One trading below Net Cash is.
A 9% FCF yield is not extremely cheap. 14% is.

You will have to establish your own parameters for this and of course take the prevailing interest rate environment into account. Hopefully you get the gist.

Subscribe now

3. Is there an event that is likely to accelerate the timing of when the price/value gap will close?

It should be clear that the same total return achieved over a shorter period of time results in a higher IRR. The hidden benefit of events is that they lessen the risk of various behavioral decision flaws.

Many value investors fall for some combination of confirmation bias, anchoring and thesis creep that lead them to hold on to losers too long. If the crux of your thesis is an event, that is harder to do.

What constitutes an event? I categorize these into hard catalysts and ones that accelerate, but do not force, the resolution of the price/value gap.

The simplest example of a hard catalyst is a maturity date for a bond. Let’s say you invested in a distressed bond that matures in 18 months. Your thesis is that it’s money-good. The investment case does not depend on a bankruptcy process or a potential recovery after default.

When the maturity date comes, you either get your money back and earn your target return, or you don’t. There is no ambiguity.

An example of a softer catalyst might be a company that is spinning off a bad division. Your thesis is that the bad division is dragging down the overall valuation, and once it is gone the market will re-rate the stock.

Another example is a drug company that is expecting the results of a pivotal trial. Success should cause the market to substantially update its future revenue and cashflow expectations.

Notice how these two examples are different from the bond maturity scenario earlier. In their case we are reliant on the market to respond to the event and reprice the security.

Logically it should do so if the event works out in our favor. However, unlike in the case of a bond coming due, it does not have to.

Here is something that I would not consider an event: a company reporting a good quarter or raising guidance. First of all, too many investors play that game already, so it’s tough to get any edge. Second, it’s not discrete enough to qualify, since investors should and do constantly revise their future expectations based on a whole host of news items.

There is definitely a continuum between my accelerated catalyst events and what I wouldn’t count as one at all. The exact boundary isn’t that important. Being aware of events that can unlock value is.

How I Use Questions 1 through 3

If a security passes any one of questions 1 through 3, it’s interesting and is worth further work. If it passes any 2, it moves near the top of my research list. If it passes all 3, I drop everything work-related and start researching.

The danger is investing in what I call The Dead Zone. Companies that are good enough and maybe not too expensive. At best that leads to lukewarm results. At worst it causes you to lose money when something goes wrong.

You might, correctly, point out that almost no opportunities will pass all 3 filters, and very few will pass 2. That’s right. Good investments are rare, as they should be.

The natural implications of using these filters are:

Long periods of inactivity
Concentrated portfolio
Occasional high cash balances

That’s not comfortable for most for reasons ranging from business constraints to inability to handle volatility. That’s not irrational. While the potential rewards of successfully following this approach can be much higher than those of a more conventional diversified approach, the risk of failure is also higher if it is not executed well.

4. Is this company becoming a better business, staying the same or getting worse?

This is an obvious question, but not one that I systematically applied as part of my process at a big-picture level. Then an investing friend pulled me aside after a presentation at a conference and told me that I needed to listen to the message and add it to my process. He was right.

What we are talking about here isn’t merely things like the rate of earnings growth. We are trying to go back to basics and answer if this company is structurally becoming better or worse. That can occur independently of the rate of growth, although in some ways the two can be connected.

When I looked at my portfolio, too many companies were either getting worse or at best staying the same, with the only positive thing to be said is that their stocks were cheap.

This isn’t an argument against cheap stocks. And yes, you can make very good returns in extremely cheap securities of challenged companies.

However, at the very least you should:

Be aware of how your whole portfolio looks with respect to this question
Use the answers to inform your position sizing
Use any changes in this answer as a trigger for changing your mind about an investment

Do this: go through your portfolio and answer this question for every investment. Depending on your style you might be surprised to find how few, if any, improving companies you own. At least not ones that you have to pay nosebleed prices to afford.

5. How consistent have recent results been with my thesis?

A while back I added an Investment Thesis Tracker to my process. It forces me to record, with zero excuses, how the company’s results came in vs. my Base Case thesis.

No explanations. No “but it’s because the economy is weak.” Just the facts.

I use a 5-point, -2 to +2 grading system to record the magnitude of deviation, with 0 meaning that things are in line with what I expected to happen.

To be clear, this isn’t about modeling quarterly earnings and seeing if the company beat them or not. I always thought that was a silly game grownups play. Rather, this is about marking my thesis to reality and helping me reduce anchoring.

The next step is to then map these to actions. For example, if I have 3 quarters of results below my expectations in a row, I freeze myself from adding to a position. Severe misses lead to re-underwriting the investment case from scratch.

You can create your own triggers. The point is to be objective in tracking this and have it trigger useful actions or prevent harmful ones.

6. In which of the following categories do the problems facing the company fall: cyclical, structural, internal, balance sheet?

Some companies are pristine and have no problems. The problem with that, pun intended, is that they are rarely undervalued.

Some problems are worse than others and are harder or impossible to fix. For example, structural problems rarely get better. On the other hand, cyclical problems should go away on their own as long as the company has the balance sheet strength to withstand the cycle.

Internal problems can be nuanced. The base rate probabilities of turnarounds are low. However, once a turnaround shows evidence of turning, the odds flip in our favor. It’s also hard to combine a turnaround, already a difficult endeavor, with other problems.

A stretched balance sheet can be benign if everything else is going well. However, if you combine it with a severe recession, what might have been an easy fix becomes an existential threat.

A company that has more than one category of problems is in much bigger danger than one that has a problem in a single category. So, if we were to have any problems at all, we would like them to be in the single category of cyclical issues.

Warren Buffett pointed out in one of Berkshire Hathaway’s annual letters that even if we are going to be correct 80% of the time answering a single question, if we need to answer 3 different such questions correctly, then we are only about 50% likely to be right.

Sometimes there are extenuating circumstances to take on the challenge of investing in a company with multiple types of problems. However, that is rare.

So be aware of what you are signing up for and be sure that is what you want to take on. Investing is like an exam where you can skip as many questions as you want with no penalty. Under such rules it’s foolish to try to answer the hard ones.

7. To what degree does the thesis rely on what has already been happening continuing vs. a change from the past?

One pattern that I have observed from working on the Investment Autopsy series is that both successful and unsuccessful investing theses tend to have something in common among themselves. Successful theses frequently involve betting that what has already been happening will continue. Nothing new needs to occur. Management just needs to keep doing what it has already been doing.

On the other hand, unsuccessful theses have frequently been of the ‘this time it’s going to be different’ variety. Whether that’s a company executing an unproven turnaround or a secular threat suddenly abating, that has not been a fertile ground for success.

Sometimes things do change. Successful results stop for internal or external reasons. Other times turnarounds do occur. However, you should start with the understanding of the base rate probabilities and invest accordingly.

How I Use Questions 4 through 7

These questions work for both new ideas and existing positions. They also allow me to gauge the portfolio to make sure that it’s not skewed towards just one kind of investment idea.

What all of these have in common is that they help me weed out the almost good-enough ideas that used to dominate the portfolio years ago. Think about this: what is the problem with a decent company with a kind of cheap stock?

Well, these usually have some of the exact characteristics that questions 4 through 7 are meant to guard against:

Business that is getting worse
Problems in multiple categories
A thesis that isn’t tracking
A long shot hope that it will be ‘different this time’ with limited evidence that it will

Frequently, these negatives more than justified the low valuation, making these seemingly good enough investments bad in practice. By explicitly applying questions 4 through 7, my intent is to keep the deservedly cheap stocks from sneaking into the portfolio and only allow in the genuinely undervalued investments.

Conclusion

I hate sensational claims like ‘if you only do X, Y and Z your investing results will be amazing.’ Investing is really hard. After 25 years doing it I think it is harder, not easier. That’s not because I got worse, but because I substantially underestimated how hard it was when I started out.

However, I can tell you that applying these questions to my own investing, and furthermore building them into a mental model scorecard, has really improved my investing. It made me much more balanced and multi-dimensional, and more aware of the hidden risks in my portfolio.

I hope this framework does the same for you.

If this article helped clarify your thinking, please restack it to help others.

Disclaimer: Not financial advice, for educational purposes only.

About the author

10-Minute Investment Autopsy No. 18: Sprint (S)

Gary Mishuris, CFA — Fri, 05 Jun 2026 02:47:18 GMT

If you haven’t read the guide to the 10-Minute Investment Autopsy series, you can find it here.

The Original Thesis

Who: Bill Miller and me

When: June 2005 and June 2006

What: Sprint Nextel (ticker: S)

The Thesis:

Economics of telecom are undergoing rapid change
The market is underestimating the benefits of wireless consolidation to a structure where 3 players are controlling 75% market share
Sprint Nextel is the 3^rd largest wireless company and overall telecom provider in the U.S.
The company has a differentiated product offering with a clear technology path
Cost cutting synergies from the merger should be north of $500M per year
Bill bought more shares after Sprint Nextel shares declined post-merger in 2006
He did not believe that things had changed and therefore perceived the lower price increased his future IRR
He believed that the market was too focused on short-term operating metrics and that progress at the company would be non-linear
The shares, at 5.5x EV/EBITDA are trading at a big discount to other subscription-based companies whose stocks trade in the 8-9x range
In June 2006 Bill believed that Sprint’s private market value, conservatively estimated, was 50%+ above the then-current price

These are the highlights of Sprint Nextel’s then-recent financials up to the point when Bill was presenting his thesis:

This is the stock chart up to the time when Bill presented his thesis:

Pause here. Think through the thesis and the facts and decide what you agree with, what you disagree with and whether you would invest based on the information available.

What Happened (Just the Facts)

Over the 5 years following Bill’s 2006 interview, Sprint’s stock was down 74% vs. +14% for the market

There is a lot more to the case:

The Autopsy - the reasons for what happened
The Lessons that you can apply to your own investing
Discussion Questions for you to think about and discuss with other thoughtful investors in the weekly case thread

AI for Serious Investors #2: Three Skills That Will Improve Your Research

Gary Mishuris, CFA — Tue, 02 Jun 2026 15:25:13 GMT

In AI for Serious Investors No. 1, we covered what Claude Skills are, how to install them, and you got the Special Situation Screener Skill to improve your idea generation. In this article I am going to share three new Skills that I developed that you can start using right away to improve your research.

Quick Note to Paid Subscribers: As usual, all the Skills in this article are free for you. Just head to the end to find the 100% off codes. When you use them, no payment info is required, you will be able to download the Skills right away.

I have a lot more AI-related tools in the pipeline that are in various stages of development, so before we dive into what I am releasing today, I want to establish a framework for you to think about where each tool fits in.

Starting with today’s article, for each AI resource that I release I will give you:

The stage where it fits into the investing process
Degree of technical savvy required to use it (Low/Intermediate/Advanced)
What tools/resources you need to already have to use it
Expected time per use

This way you can select the resources that are best suited to your own workflow and situation.

In my 5 Sources of Investing Edge article, I covered the stages of an investment process:

Each AI resource will be classified into one or more of the 5 investing process stages: Idea Generation, Research, Investment Decision, Portfolio Construction and Information Processing.

This system will let you quickly understand where an AI tool fits in and whether you want to use it in your own work. Without further ado, let’s get to today’s Skills.

Competitors Skill

Investing Process Stage: Early Research

Technical Savvy Required: Low

Pre-requisites: Claude subscription, works in web browser

Expected Time: under 2 minutes per run

This Skill quickly researches who the competitors are of a company and provides you with a brief overview. This is useful in a few ways:

As part of building a to-do list for further research on a new company you are working on
As a sanity check on a company you think you already know well
As a building block for future AI tools that might be able to take the output and automate other steps in the investing process

Download the Competitors Skill here.

Proxy Analysis Skill

Investing Process Stage: Research

Technical Savvy Required: Low

Pre-requisites: Claude subscription, works in web browser

Expected Time: under 2 minutes per run

This Skill works for U.S. companies, finds the latest Proxy Statement, and analyzes management incentives. I believe the way management chooses to pay themselves is an important signal about how aligned they are with shareholders. A compensation system that matches your philosophy is a positive sign.

I use this Skill early in my research, and sometimes even at the tail end of idea generation. Remember, you want to kill bad ideas quickly. If I see a poor incentive structure I might kill the research right at the start and save myself hours.

If I see an incentive scheme I particularly like, I might bump that candidate up my priority list. In my case, I have a strong preference for ROIC or Economic Profit related incentives. So beyond just digging up the usual disclosures, the Skill grades them 0 to 10 on how heavily ROIC-related factors influence management pay.

Companies that heavily weigh ROIC-related factors in compensation are rare. That might be an interesting positive signal for choosing which ones to research deeper. We did a test on a random sample of 100 U.S. companies, and here is what we found:

84 had no ROIC-related factors in their management compensation
The 16 that did had a score that ranged between 2 and 9
Only 5 companies out of 100 had a score of 6+

Download the Proxy Analysis Skill here.

Forensic Accounting Analysis Skill

Investing Process Stage: Research

Technical Savvy Required: Low

Pre-requisites: Claude subscription, works in web browser

Expected Time: under 10 minutes per run

Accounting issues range from mild earnings smoothing to outright fraud. One way to guard against them is to look for companies with strong FCF relative to Net Income. However, that is not enough.

This Skill takes the last 5 annual 10-K filings for a U.S. company and does a 2-pass forensic accounting sweep looking for red flags. The first pass uses Howard Schilit’s Financial Shenanigans framework. The second is an independent pass using broader forensic heuristics. I highly recommend Schilit’s book to all my students as a great resource for learning how to detect financial statement manipulation.

Warning: Because this Skill requires a lot of information to complete the pass, very infrequently it will abort in Claude’s web environment due to context window size constraints. In our testing this happens well under 5% of the time so I still find it to be highly useful. If you are an advanced user and this bothers you, reach out as I have built a Claude Code version of this Skill where this isn’t an issue.

Download the Forensic Accounting Analysis Skill here.

Conclusion

I have a full pipeline of other AI-related tools that I am excited to share with you in future articles, so stay tuned!

Two disclaimers:

AI can (and probably will) make mistakes. I tested these Skills and use them myself but sometimes a) a run may abort due to technical issues or b) some of the info can be off. I have found these cases to be rare and an acceptable cost of using tools that most of the time work well. You will have to make that tradeoff decision yourself.
This is not investment advice; I am just sharing my work with you and strongly encourage you to both check any AI tool you use and always make your own investing decisions.

A Request

Help grow our community of thoughtful investors by restacking this article to help it reach more serious investors like you.

10-Minute Investment Autopsy No. 17: TJX Companies (TJX)

Gary Mishuris, CFA — Fri, 29 May 2026 01:23:23 GMT

If you haven’t read the guide to the 10-Minute Investment Autopsy series, you can find it here.

The Original Thesis

Who: Lloyd Khaner

When: April 2006

What: TJX (ticker: TJX)

The Thesis:

TJX is a company of off-price retailers selling branded items 20%-60% off
Major brands are T.J. Maxx and Marshalls
Former CEO, Ben Cammarata, came back last year when the company wasn’t doing well. He knows the business really well and owns a lot of stock
There wasn’t one big problem, but rather a series of small things due to poor execution
The solution is just returning to basics and executing better (e.g. hiring new buyers to refresh the merchandise, reduce square footage growth to improve operations and margins)
Lloyd thinks that once execution is fixed the company can grow square footage 7%-8% per year with 3%-4% same-store sales growth
He believes net margins will expand from 4.2% in 2006 to 4.7% in three years
Management is committed to returning money to shareholders via buybacks, with $650M (5% of shares outstanding) targeted for 2006
Stock trades at less than 16x Lloyd’s earnings estimate for 2006 of $1.55, which he considers very cheap given that he expects earnings to grow in the high teens
He believes the stock should see multiple expansion to the 18x-19x range and should double in a couple of years as a result

These are the highlights of TJX’s then-recent financials up to the point when Lloyd was presenting his thesis:

This is the stock chart up to the time when Lloyd presented his thesis:

Pause here. Think through the thesis and the facts and decide what you agree with, what you disagree with and whether you would invest based on the information available.

What Happened (Just the Facts)

TJX shareholders handily beat the market over the 5 years following when Lloyd presented his thesis, with the stock producing a 18%+ per year return vs. the S&P 500 at 3%.

There is a lot more to the case:

The Autopsy - the reasons for what happened
The Lessons that you can apply to your own investing
Discussion Questions for you to think about and discuss with other thoughtful investors in the weekly case thread

10-Minute Investment Autopsy No. 16: Blockbuster

Gary Mishuris, CFA — Thu, 21 May 2026 16:37:41 GMT

If you haven’t read the guide to the 10-Minute Investment Autopsy series, you can find it here.

The Original Thesis

Who: Arne Alsin

When: November 2005

What: Blockbuster (ticker: BBI)

The Thesis:

There is a lot of negative in the market outlining reasons why Blockbuster is going away
Arne is convinced there is still a demand segment the company can serve
Blockbuster took a $550m hit to revenues by ending their late fees in 2004. If you back that out, the company grew its revenues despite threats from Netflix, video on demand and DVD sales
They have a vibrant retail business selling videogames and DVDs, which was about a third of revenues and grew 15% last year
They also have an online business that has more than 1M subscribers and is expected to grow to 2M by the end of 2006.
Blockbuster has an opportunity to right-size its operating structure
The argument that Blockbuster is going to die is suspicious because 1) everyone is saying it and 2) it ignores unexpected positive surprises the company can deliver as they reinvent themselves
They have a well-known retail franchise that gives them opportunities to provide new offerings to consumers
The stock is very cheap, trading at less than 40% of sales of just the video game and DVD retail segment alone

These are the highlights of Blockbuster’s then-recent financials up to the point when Arne was presenting his thesis:

This is the stock chart up to the time when Arne presented his thesis:

Pause here. Think through the thesis and the facts and decide what you agree with, what you disagree with and whether you would invest based on the information available.

What Happened (Just the Facts)

Blockbuster shareholders lost all of their money as the company filed for bankruptcy in 2010

There is a lot more to the case:

The Autopsy - the reasons for what happened
The Lessons that you can apply to your own investing
Discussion Questions for you to think about and discuss with other thoughtful investors in the weekly case thread

Subscriber PULSE Check: $DAL $RYAN $MEDP $AESI $M

Gary Mishuris, CFA — Mon, 18 May 2026 15:52:08 GMT

The Details

When: Every Monday
What: Video - webcam and screen share, walking through the PULSE template
How many: Three to five subscriber-submitted stocks per episode
Who can watch: Everyone
Who can submit: Paid subscribers

This week we have three companies that I put through the PULSE framework in the video below:

Delta Airlines ($DAL)
Ryan Specialty Holdings ($RYAN)
Medpace ($MEDP)
Atlas Energy Solutions ($AESI)
Macy’s ($M)

This week’s episode is below. If you want to use the PULSE screen yourself to save time and focus on the best opportunities, you can get the PULSE template here.

This Week’s Subscriber PULSE Check

How to Submit

If you’re a paid subscriber, just reply to any Subscriber PULSE Check email with the ticker or tickers you would like me to screen or put it into the dedicated Subscriber PULSE Check chat. I’ll select from the submissions each week. If yours isn’t picked right away, it stays in the queue.

If you are not a paid subscriber yet and there is a stock you have been wondering about - this is one of the things that a paid subscription gets you.

Subscribe now

If the content on the Behavioral Value Investor has been helpful, I would greatly appreciate it if you could restack this post to help grow our community.

Disclaimer: Not financial advice, for educational purposes only

About the author

10-Minute Investment Autopsy No. 15: McKesson

Gary Mishuris, CFA — Thu, 14 May 2026 12:54:30 GMT

If you haven’t read the guide to the 10-Minute Investment Autopsy series, you can find it here.

The Original Thesis

Who: Larry Robbins

When: October 2005

What: McKesson (ticker: MCK)

The Thesis:

Drug distributors are the choke point in the value chain, with the top 3 controlling 90% market share
Business model has changed from speculating on inventory to fee for service, resulting in much lower capital intensity and a higher conversion from Net Income to FCF
McKesson is a share taker in the industry
Company will benefit from higher drug utilization and higher generic penetration
Thinks the company will earn $3 in EPS in Fiscal 2007, 10% above Wall Street estimates
Believes McKesson will grow 20%-25% through 2008 and then 12%-15% from there
At 15x EPS, the stock is trading at a discount to the market which is too cheap for a business that is hitting on all cylinders for the next few years

These are the highlights of McKesson’s then-recent financials up to the point when Larry was presenting his thesis:

This is the stock chart up to the time when Larry presented his thesis:

Pause here. Think through the thesis and the facts and decide what you agree with, what you disagree with and whether you would invest based on the information available.

What Happened (Just the Facts)

McKesson stock meaningfully beat the market, with the stock increasing at ~9%+ per year over the 5-year period, compared to the market at 2%
Compared to the other two drug distributors, Cardinal Health and AmerisourceBergen, it did much better than the former but not as well as the latter

There is a lot more to the case:

The Autopsy - the reasons for what happened
The Lessons that you can apply to your own investing
Discussion Questions for you to think about and discuss with other thoughtful investors in the weekly case thread

Subscriber PULSE Check: $ZTS $WFG $CSL AU $NMM

Gary Mishuris, CFA — Mon, 11 May 2026 16:44:15 GMT

The Details

When: Every Monday
What: Video - webcam and screen share, walking through the PULSE template
How many: Three to five subscriber-submitted stocks per episode
Who can watch: Everyone
Who can submit: Paid subscribers

This week we have three companies that I put through the PULSE framework in the video below:

Zoetis ($ZTS)
West Fraser Timber ($WFG)
CSL Ltd ($CSL AU)
Navios Maritime Partners ($NMM)

This week’s episode is below. If you want to use the PULSE screen yourself to save time and focus on the best opportunities, you can get the PULSE template here.

This Week’s Subscriber PULSE Check

How to Submit

If you are not a paid subscriber yet and there is a stock you have been wondering about - this is one of the things that a paid subscription gets you.

Subscribe now

If the content on the Behavioral Value Investor has been helpful, I would greatly appreciate it if you could restack this post to help grow our community.

Disclaimer: Not financial advice, for educational purposes only.

About the author

10-Minute Investment Autopsy No. 14: Bed Bath & Beyond

Gary Mishuris, CFA — Thu, 07 May 2026 15:43:51 GMT

If you haven’t read the guide to the 10-Minute Investment Autopsy series, you can find it here.

The Original Thesis

Who: Mario Cibelli

When: June 2006

What: Bed Bath & Beyond (ticker: BBBY)

The Thesis:

Great business with very high ROIC
Grew from 38 stores in 1992 to 740 stores in 2005
Stores are well-merchandised and the company doesn’t spend a lot of money on advertising
Franchises like Bed Bath & Beyond and Walmart are more sustainable than other retailers in the past
Company has $1B of net cash and will probably generate another $1B in FCF over the next 2 years
Company still has years of growth ahead of it, with a potential for 1,200 stores in 5 years
Other retail concepts, Christmas Tree Shops and Harmon Stores, provide additional growth potential
Major competitor, Linens ‘n Things, went private and has lots of debt, making it weaker
Thinks that stock returns will at least match the mid-teens earnings growth that he expects to see going forward
Also sees potential for valuation multiples to expand

These are the highlights of Bed Bath & Beyond’s then-recent financials up to the point when Mario was presenting his thesis:

This is the stock chart up to the time when Mario presented his thesis:

Pause here. Think through the thesis and the facts and decide what you agree with, what you disagree with and whether you would invest based on the information available.

What Happened (Just the Facts)

Bed Bath & Beyond stock meaningfully beat the market, with the stock increasing at ~12%+ per year over the 5-year period, compared to the market at 3%
However, the longer-term performance is a completely different story. But before we get to that, let’s go through the autopsy of why the stock did so well over the 5-year period after Mario presented his thesis

There is a lot more to the case:

The Autopsy - the reasons for what happened
The Lessons that you can apply to your own investing
Discussion Questions for you to think about and discuss with other thoughtful investors in the weekly case thread