Behavioral Value Investor

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

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.

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.

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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.

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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.

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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.

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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.

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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.

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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

Subscriber PULSE Check: $MT $BF/B $BIR CN $ANODB SS

Gary Mishuris, CFA — Tue, 05 May 2026 02:24:12 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:

ArcelorMittal ($MT)
Brown-Forman ($BF/B)
Birchcliff Energy ($BIR CN)
Addnode Group ($ANODB SS)

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. 13: Gartner

Gary Mishuris, CFA — Fri, 01 May 2026 01:45:18 GMT

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

The Original Thesis

Who: Jeffrey Ubben

When: January 2006

What: Gartner (ticker: IT)

The Thesis:

Gartner is the leading subscription-based research company focused on the professional IT industry
The company provides mission-critical research for IT executives making purchasing decisions
Renewal rates have been ~ 80%, even in downturns
New CEO, Gene Hall, was hired from ADP and he has been energizing the core research business, which is where Gartner makes all its money
Company bought its number two research competitor and now has 90% market share in research for senior tech executives
Shift to per-seat pricing is going to have a positive impact on revenue and renewal rates
The company is ideally positioned to benefit from pent-up capital spending by corporations
Jeffrey is on the board so he cannot comment specifically on valuation but his firm owned 15%+ of the company at the time he presented the thesis

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

This is the stock chart up to the time when Jeffrey 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)

Gartner’s financials following Jeffrey’s presentation were as follows:

Over the 2005 to 2010 5-year period:

Sales grew at a 5% annual rate
EBITA grew at a 19% annual rate
EBITA margins expanded from 7% to 13%
EPS grew at a 25% annual rate
Net Debt declined from 176M to 100M
ROIC doubled from 13% to 26%

Gartner shareholders handily beat the market, with the stock increasing at 20%+ per year over the 5-year period, compared to the market at 2%

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 5 Sources of Investing Edge That Matter

Gary Mishuris, CFA — Wed, 29 Apr 2026 12:40:40 GMT

You have heard the usual framing that investing edge is informational, analytical or behavioral. True, but the framework I am about to share with you is much more useful.

First, let’s define investing edge as a repeatable process advantage that should lead to better decisions than most investors.

The conventional wisdom tells you that edge exists in those 3 categories. That’s nice, but how do you get it yourself? That’s what I am about to teach you.

To develop sustainable investing edge, you need to change your perspective. Rather than thinking about investing edge by type, you should think about the steps of your investment process. Then, you need to engineer edge into one or more of those steps.

There are 5 broad stages to an investment process:

Idea Generation: determines what enters the funnel
Research: determines how accurately and efficiently you understand it
Investment Decision: determines how you convert analysis into action
Portfolio Construction: determines how much your best insights matter
Information Processing: updating stages 2 through 4 as reality changes

Each of these stages gives you an opportunity to add to your investing edge. Over time it is this edge that will lead to your excess returns.

Beating the market is very hard. Being deliberate about your investing edge is your best chance to succeed.

Idea Generation

To get an edge from idea generation, you need to either find ideas faster than others or find better ideas. Speed is important up to a point. If you get bogged down just generating a list of potential investments to look at, one of 3 things will happen:

You will never actually research or act on them
They will no longer be actionable by the time you get to them
You will give up and go back to using the usual sources for ideas that everyone else is using, which equals no edge at this stage

However, just being ultra-fast is not usually enough for an edge. What you need is to generate promising differentiated ideas in a reasonable amount of time.

There are 4 categories of differentiated ideas:

Exclusive - Available only to you or a small group. Think of top-tier VC firms like Sequoia who get first look at the best start-ups. Or think of a business owner wanting to sell to Berkshire Hathaway and nobody else because he cares about his employees having a permanent home.
Elusive - These are hard to find ideas that 99% of investors ignore. Maybe they are small special situations like spin-offs or restructurings. Or perhaps they are Phil Fisher-style compounders but in geographies that most investors don’t hunt in. You won’t read about them in Barron’s or the Wall Street Journal.
Repulsive - If most investors’ first impulse is to pass because an idea is too messy, then almost nobody is analyzing it even though it is in plain sight. Perhaps this is an ugly litigation with a lot of uncertainty. Or some kind of scandal - remember Buffett and the American Express salad oil scandal?
Misunderstood - I hesitate to include this category, because I don’t want you to think that it includes something like you thinking that Visa grows 1% faster than other people think. That’s not enough. I am talking about seeing a business completely differently than the consensus. Maybe everyone sees it as a money-losing operation, but you understand it to be a company with a very profitable core that is running a lot of organic reinvestment expenses through its Income Statement that are likely to pay off in the future.

You don’t have to have an idea generation edge. You can just say “OK, I will not have an edge at this stage of the process because my edge will come later on.” However, if you want an idea generation edge, it needs to come from one of these four categories, and in a reasonable-enough time to be actionable.

That’s why I have been using the 5-signal PULSE framework for over a decade to quickly get to the heart of an investment opportunity. The template allows me to dramatically increase my throughput and look at more ideas quickly without sacrificing quality. Combined with looking at a broad range of elusive and repulsive candidates, it adds to my investing edge from idea generation.

That’s also why I built the Claude-based Special Situations Screener skill. It allows me to systematically generate a promising list of special situations in several markets every month. It saves a ton of time and while nothing is perfect, I have found it to be good enough to find promising undiscovered special situations at scale.

A huge share of investor attention clusters around the same familiar companies. There is nothing wrong with studying them, but it is hard to build a sourcing edge where everyone else is already looking.

However, I have built an idea generation edge by systematically filtering promising ideas in corners of the market where most investors don’t look. You can do the same.

Research

Once you decide an investment candidate is worth a look, the next step is to research it. What’s the goal? It’s to:

Assess the company’s quality
Get the information necessary to build a reasonable range of outcomes for key economic variables
Establish a range of values for the security

At the Research stage, the conventional categories become useful inputs: informational and analytical edge are two ways to improve research output.

Informational edge is, literally, having useful information that few others have. No, it’s not referring to insider information. What we are talking about here is the mosaic theory - putting together pieces of publicly available or non-material information that together inform your view on an investment.

Some examples of where informational edge can come from:

Expert interviews. Several companies allow you to read a library of expert call transcripts or to request a specific type of contact that you can interview yourself.
Talking with competitors. You can call Company B and while talking with the CFO or the IR ask questions that will inform your view on your target investment, company A. Warren Buffett used to ask all of the CEOs in an industry the following question: “If you had a silver bullet to kill only one of your competitors, who would it be and why?” If 9 companies all want to ‘kill’ number 10, guess what? That’s probably a company that’s doing something pretty special.
Attending trade shows/industry events. Visiting a company is fine, but when you attend a trade show you can get much more unvarnished insight of what is happening in a market.

Be careful, there is a pitfall here. It’s tempting to want to know more about a company for its own sake. That’s a trap. It might make you feel better, but it’s not likely to lead to better decisions.

A story from when I was a young analyst at Fidelity comes to mind. The industry that I was assigned had a buyside analyst, a partner at a venerable investing firm across the street, who was always chosen as the ‘Best of Buyside’ by the Institutional Investor magazine. I was curious why, so I asked a sell-side analyst whom I knew well.

His answer: whenever he took a company on a roadshow and asked the CEO who knows them best, it was always that analyst that did. I was impressed.

Years later, I got to know the associate at that firm who had worked for that analyst. I asked him how much that analyst outperformed their benchmark over the long-term, since at that firm analysts also managed a portion of the assets by investing those funds within their assigned sector.

The answer surprised me: that ‘Best of Buyside’ analyst who knew more than anyone about the companies in their industry actually underperformed. More information is not always better. Sometimes it just gives you a false sense of confidence.

Analytical edge comes from synthesizing the same information better than most market participants. Some examples are:

Interpreting information differently through the lens of specific frameworks
Finding patterns in information that are useful and non-obvious
Adjusting financial statements to get closer to the true underlying economics of the company
Detecting patterns of accounting fraud in financial statements
Correctly identifying which few factors are material to the final conclusion and focusing on those

The Research stage is governed by the (Quantity x Quality) relationship. Quality is in turn determined by (Relevance x Correctness x Completeness).

Therefore:

Research Output = (Quantity x Relevance x Correctness x Completeness)

It’s here that judgement comes in. There is a tradeoff between increasing Completeness and increasing Quantity.

In practice, your research needs to be complete enough to not leave out anything material to change your conclusion, but not more than that. Going further lowers the number of companies you can research without meaningfully increasing the quality of your research.

If you can research 10 potential investments with sufficient quality in the time in which your competition can only do 5, you have an edge. Assuming equal caliber of candidates coming out from the idea generation stage, you are going to have a higher chance of finding a good investment.

Speed matters in researching potential investments. You can’t afford to waste a lot of time on ideas that you should have killed much earlier on in your investment process. On the other hand, you shouldn’t cut corners. If you get this step wrong, everything else will be wrong as well.

So, what’s the answer?

Automate what can be automated without sacrificing quality.
Do your research in the right order so that you can kill ideas quickly.
Invest your research time in a smaller set of investment candidates that have already passed through your initial filters.

Correctly getting to a quick no frees up your time and resources to research high-potential ideas.

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Investment Decision

This stage has two components: (a) correctly deciding what you should do and (b) acting on that knowledge. You would think that they are one and the same, but they are not.

Think about dieting. You know what you should and should not do (e.g. you should eat veggies, you should not eat donuts). Does that mean that everyone always acts on that knowledge? No. Knowing what to do and doing it are different skills.

The goal of the Research stage is to give you the inputs to answer the question: based on my process, is this security an attractive investment? Making the correct decision at the Decision stage means mapping your analysis of the company and its security to a yes or a no.

To arrive at the right conclusion, you want an objective mapping between your research conclusions and your yes/no decision. This is not the place to introduce gut feelings or creativity into your process. You should have a clear set of rules that make sense to you based on how you invest.

This is a great point in the process for introducing a robust step to reduce behavioral biases. I like to use what I call a ‘Devil’s Advocate’ process to compare my budding investment case with a strongly articulated case for why it’s a terrible idea.

This is the right point in the process to rigorously stress test the idea. It comes before your conclusions have solidified and your confirmation bias is too strong.

On the other hand, it’s far enough in the process because you already have research and analysis of your own to compare against. So you are less likely to be incorrectly turned away from a promising idea by a scary-sounding case that nonetheless is insufficiently strong to rebut your investment work.

Using such a Devil’s Advocate process can be a meaningful source of investing edge. Few do it systematically. I had a senior leader at a prior firm tell me that it’s a waste of time because it reduces the number of opportunities we can look at. I don’t think so, not if your goal is to make the right decisions, rather than simply go through the most candidates.

That’s part (a). Part (b) is then acting on that decision. What are some reasons an investor might reach a conclusion that the security is attractive in stage (a) but then fail to act accordingly in stage (b)? Here are a few that I have observed in my over 25 years of professional investing experience:

Analysis suggests the security is attractive, but the investor is afraid of losing money because of adverse recent events or negative security price trends
The professional risk from investing is high because the idea is unknown or unconventional, exposing the investor to potential ridicule or negative career consequences if they invest and turn out to be wrong
The investor has strong behavioral biases that color his view and make him overrule his analysis

I don’t have an answer to the problem of a professional investor choosing to invest sub-optimally for his clients to benefit his own career or business. It’s a much thornier question than I can really address here.

However, we can combat the other issues on this list. One serious attempt is to create a deterministic mapping between the combination of quality assessment and valuation and whether the investment is a ‘yes’ or a ‘no.’

Importantly, if this rule says that the investment is a ‘yes’, it’s not an automatic buy. There are still important portfolio construction considerations to take into account.

Now, the output of your Research stage can be:

Quality, broadly defined
A range of intrinsic values for the security
Whether the security clears your minimum bar for investing

If done well, this lowers the likelihood of your being impacted by behavioral biases at the Portfolio Construction stage.

Portfolio Construction

Let’s say you have the same quality idea generation, research process and investment decision process as everyone else. You can still get an edge.

How? The first way is position sizing. For example, I recently made a successful investment, Warner Bros., that had a meaningful impact on the partnership. I wasn’t the only one who owned it, although there weren’t many of us given how out of favor the company was. However, it had by far the biggest impact on our partnership’s portfolio of anyone I know, because of sizing.

Research studies have shown that fund managers’ top positions outperform the rest of their portfolio. That means that experienced investors do have an idea about which are the best opportunities in advance.

However, not everyone has the courage of their convictions. Many investors don’t make their best ideas as big as they think they should deep down for fear of looking foolish, being blamed by clients, losing their job or their bonus, etc.

The other extreme is also a risk. There are folks who are so overconfident that they make huge bets on a single investment that they will not be able to recover from if they are wrong.

I usually hear folks like that quote Charlie Munger about having only 3 investments, or reference how Warren Buffett put half of his partnership’s capital in American Express during the salad oil scandal in the 1960s. What these investors forget is that a) they are not Munger or Buffett b) chances are the opportunity they are considering isn’t anywhere close to how attractive American Express was when Buffett made it his top position.

There is no one right level of concentration. It depends on many factors. However, there is a right level for you and your investment process in a particular market environment, and if you can get close to it that can be a source of edge since many investors will deviate widely from what is optimal for them.

The second way is correlation management. I am not talking about modern portfolio theory and managing how stocks wiggle together, or not, over short periods of time. I am talking about thinking deeply about what has to hold true for each investment to work out long-term, and making sure that being wrong on one or two key assumptions cannot sink the entire portfolio.

This is particularly important for concentrated investing. You simply don’t have the auto-diversification that someone closely hugging an index or owning hundreds of securities gets.

So, thinking about how the different pieces of your portfolio fit together under various scenarios over the long term can be an important source of edge.

Information Processing

A concept that most investors underappreciate is that investing is not one decision. It’s not even two decisions: the buy and then the sell. It’s a myriad of decisions that occur along the whole journey of an investment.

The concept is information processing. Each of our investments has a stream of new information or analysis that is available to us over time. Most of it is noise.

However, it’s not all noise. Having a systematic process for separating which developments should affect your thesis, and perhaps the investment decision or position size can be a meaningful source of advantage.

Many investors think of the investment process linearly. You generate an idea, research it, make a decision, and then construct the portfolio.

That framing is incomplete. Once a security is in the portfolio, new information and new analysis should trigger a continuous loop through Research, Investment Decision, and Portfolio Construction. The goal is not to react to every data point. Most new information is noise. The goal is to have a process for deciding which developments are meaningful enough to revisit the thesis, the decision, or the position size.

There are clear opportunities for an edge here, for example:

Having a robust loop at all, since most investors either don’t do it or do it haphazardly
Choosing the right inputs as signal vs. noise
Correctly deciding the right degree of effort that still gets you to an appropriately correct decision without using up so much time and resources as to be impractical

Here are some ideas of how you can engineer an edge at this stage:

Define a threshold which requires you to re-analyze an investment from scratch. For example, it could be your investment thesis not tracking for a certain period of time or with a certain severity. I use a formal thesis tracker to tell me when to trigger this step for each company that I own.
Periodically start with a clean sheet of paper and the most current version of your Research stage for each of your holdings. Construct a new portfolio without looking at your current weights. Then compare the two and act if warranted.
Systematically run a Devil’s Advocate research process at a certain time interval on each holding to make sure your research and conviction are not stale.

Conclusion

Classifying investing edge as informational, analytical, or behavioral is correct as far as it goes. It is just not the most useful way to actually build one.

A more practical approach is to break your investment process into stages and ask where you are deliberately trying to be better than the marginal investor competing with you.

You do not need an edge everywhere. You probably cannot have one everywhere. What you can do is be explicit about where your edge is supposed to come from, then build workflows, rules, tools, and habits that increase the odds that the edge actually shows up in decisions.

A simple exercise may help. Take out a blank page and write down the five stages:

Idea Generation
Research
Investment Decision
Portfolio Construction
Information Processing

Next to each stage, answer three questions:

Do I have a real edge here, or am I just hoping that I do?
What specific workflow, rule, tool, habit, or constraint creates that edge?
How would I know if it is working?

For some stages, the honest answer may be that you do not have an edge. That is fine. The danger is pretending. Once you know where your edge is weak, you can decide whether to build it, partner around it, avoid competing there, or make sure your edge comes from a different stage.

This is what I am trying to do as I keep iterating on the investment process at Silver Ring Value Partners. It is also what I am trying to help you do here at Behavioral Value Investor.

Most investors do not lack opinions. They lack a deliberately engineered process for turning their strengths into repeatable decisions. The question is where, exactly, your process is designed to create an edge.

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

Disclaimer: Not financial advice, for educational purposes only.

About the author

Subscriber PULSE Check: $NVGS $WLK $PYPL $CAR $CALM

Gary Mishuris, CFA — Mon, 27 Apr 2026 12:53:20 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:

Navigator ($NVGS)
Westlake ($WLK)
PayPal ($PYPL)
Avis ($CAR)
Cal-Maine Foods ($CALM)

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.