The Anatomy of Our Analysis: From Global Trends to Precision Entries

Our Full Toolkit: Fundamentals, Technicals, & Options Strategy 📈

Hey Ageless Investing Community,

Many of you have been following our journey as we analyze companies and delve into the intricate web of global trends. A few months ago, I told you that if you haven’t heard much from me for a while, I’m working on something big.

We've been "turning over a lot of rocks," as Peter Lynch would say, and the insights we're unearthing are compelling. It’s a process that’s both demanding and incredibly rewarding.

Today, I want to pull back the curtain further on how we conduct this research – a multi-layered approach that goes far beyond surface-level numbers – and share an important update about how we’ll be sharing these comprehensive analyses going forward.

This isn’t financial advice, Please read my disclaimer at the end.

More Than Just an AI Query: Crafting True Insight

You might see "AI" associated with our work, and rightly so – it's a powerful tool in our arsenal for processing information and stress-testing ideas. But I want to be crystal clear: what we're building here is far more than simply "telling an AI to research a stock."

Each company deep dive is a meticulous synthesis, a convergence of:

1. Navigating the Big Picture: Dozens of Macro & "Stealth" Trends:

   • Our starting point is often the major secular trends we believe are shaping the future (energy transition, resource scarcity, technological disruption, demographic shifts, geopolitical realignments, etc.).

   • We also dedicate significant effort to identifying potential "stealth trends" – those underreported stories gaining momentum that could have an outsized impact, much like COVID in early 2020.

2. Standing on the Shoulders of Giants: A Latticework of Investment Philosophies:

   • We don’t rely on a single viewpoint. Instead, we run companies through the critical lenses of investing giants:

     • Benjamin Graham & David Dodd: Focusing on financial prudence, a margin of safety, normalized earning power, and distinguishing investment from speculation.

     • Warren Buffett (Berkshire Hathaway): We seek to identify "wonderful businesses at fair prices." This involves a deep understanding of a company's long-term economics, its durable competitive advantages (moats), the quality and integrity of its management, and the rationality of its capital allocation, all while insisting on a margin of safety in the purchase price. We aim to invest with a very long-term, "business owner" perspective.

     • Peter Lynch: Understanding the business, its "story" versus the facts, its specific category (Stalwart, Cyclical, Fast Grower, Turnaround, Asset Play), and looking for those "perfect stock" characteristics or overlooked gems.

     • Charlie Munger: Applying mental models, assessing competitive moats, understanding human psychology and cognitive biases, and emphasizing rationality.

     • Joel Greenblatt (Magic Formula, Special Situations): We look for opportunities in often overlooked or misunderstood areas of the market, such as spinoffs and restructurings, or by systematically applying quantitative screens for "good businesses" (high return on capital) available at "cheap prices" (high earnings yield).

     • Nassim Nicholas Taleb: Evaluating a company's fragility or antifragility to shocks, demanding "skin in the game," and navigating uncertainty.

     • Sun Tzu: Considering strategic positioning, competitive dynamics, and resource allocation.

     • Our Cognitive Bias Filter (Inspired by Munger & Taleb): Throughout our analysis, we consciously strive to identify and mitigate the impact of common psychological biases that can lead to misjudgment. This includes guarding against confirmation bias, overconfidence, anchoring, herd behavior, narrative fallacy, and many others, aiming for maximum objectivity and rationality in our conclusions.

   • We even integrate principles from Stephen Covey's "7 Habits" to assess a company's long-term operational health, foresight, and its "P/PC Balance" (balancing current profits with investment in future capabilities).

3. Rigorous Fundamental & Financial Analysis:

   • We dissect financial statements, scrutinize cash flows (P/FCF is a key focus), evaluate balance sheet strength (especially debt and liquidity – a Graham cornerstone), assess valuation from multiple angles (including custom PEG considerations and Greenblatt-inspired metrics like Earnings Yield and ROC conceptually), and analyze the "Story/Fact Ratio" to ground narratives in reality.

4. Beyond the Yield: Assessing Dividend Sustainability & Growth

   Many investors are drawn to dividends, and for good reason – they can represent a tangible return and a signal of a company's health. However, not all dividends are created equal. Our analysis goes beyond the headline yield:

   • The "Goose and the Golden Egg" (P/PC Balance): We scrutinize whether a company's dividend (the "golden egg") is comfortably supported by its free cash flow and underlying profitability, or if it's being paid at the expense of reinvesting in its future capabilities (the "goose"). A dividend paid by taking on debt or starving the business of necessary investment is a major red flag.

   • Safety & Growth: We look for a history of growing dividends backed by growing earnings and cash flow – a hallmark of a "Stalwart" (as Peter Lynch would say) or a financially prudent company (a la Benjamin Graham). An unsustainably high payout ratio on current earnings or, worse, negative free cash flow, often signals a "yield trap."

   • Rational Capital Allocation: Ultimately, we assess if paying a dividend (and its current size) is a rational use of the company's capital in the context of its growth opportunities and financial strength.

   In short, we look for dividends that are not just attractive today, but are built on a foundation of sustainable business success and prudent financial management.

The Technical Edge: Precision in a Noisy Market

Beyond understanding what to consider investing in, knowing when and how is crucial. This is where our technical analysis toolkit comes into play:

• Chart Whispering: We meticulously analyze candlestick patterns and broader chart patterns (e.g., consolidations, breakouts, reversals) on monthly, weekly, and daily timeframes to understand supply and demand dynamics.

• Mapping the Battlefield: Identifying key support and resistance levels helps us define potential entry zones, price targets, and areas where risk can be managed.

• Volume Confirmation: Volume analysis is critical to confirm the strength of price moves and patterns.

• Momentum & Divergence: We use indicators like the RSI (Relative Strength Index), looking for divergences that might signal a weakening trend or an impending reversal. The ADX (Average Directional Index) helps us gauge trend strength.

• Volatility Insights: The ATR (Average True Range) helps us understand typical price fluctuations and set realistic stop-losses. We also monitor VIX extremes as indicators of broader market fear or complacency, which can signal contrarian opportunities.

• Finding the "Edge": Crucially, we look for which specific variables affect each stock uniquely. Is it highly correlated with a particular commodity? Is it sensitive to specific economic data points or interest rate movements? Understanding these unique sensitivities can provide an analytical edge.

Options Strategy: Crafting Antifragile Risk/Reward

For those interested in leveraging options, our analysis doesn't stop at the stock. Drawing from insights gained from countless trades and deep study:

• Strategic Synergy: We look for the ideal synergy between the fundamental outlook, the technical setup, and the optimal options strategy. A bullish fundamental view on an oversold stock at strong support might call for selling cash-secured puts or buying calls, for example.

• Precision in Options: This involves:

  • Strike Selection: Choosing the right strike price based on support/resistance levels, the stock's ATR, and the desired risk/reward profile.

  • Expiration Dating: Selecting an expiration date that aligns with the expected timeframe for the fundamental catalyst or technical pattern to play out, while also considering theta (time decay).

  • Implied Volatility (IV) & IV Rank (IVR): Understanding whether options are "cheap" or "expensive" (high or low IVR) is critical. We aim to sell premium when IVR is high and potentially buy it when IVR is low, aligning with the strategy.

  • Crafting Antifragile Risk/Reward: The goal is to structure trades where the potential reward significantly outweighs the risk, or where strategies can even benefit from unexpected volatility (Taleb's antifragility concept applied to options).

Why This Takes Time: The Pursuit of Quality, Value, & Edge

As you can see, this multi-layered, deeply integrated approach – from global macro trends and investment philosophies down to specific chart patterns and options structures – isn't a quick skim. It takes considerable time and focused effort to:

• Gather and verify diverse data points.

• Apply these different analytical frameworks consistently.

• Synthesize often contradictory information into a cohesive thesis.

• Identify unique variables and potential "edges."

• Consider "adjacent possibilities" and second and third-order effects.

We believe this commitment to depth and quality is what provides true value and helps us (and you) get a much clearer picture of a company's genuine business, its underlying risks, and its real opportunities, along with potential ways to structure trades.

An Update on Access to Our Deep Dive Reports & Rankings:

We’re incredibly grateful for our early supporters and current premium subscribers. As a token of our appreciation for being with us on this journey:

• Current Premium Subscribers: You will continue to receive access to the comprehensive deep-dive reports and the detailed company ranking tables we are generating from this intensive research process as part of your existing subscription.

• Going Forward: Due to the significant time, depth of analysis, and unique synthesis involved in creating these comprehensive reports and actionable rankings, complications with sales tax on Substack, we anticipate that future iterations of these full "Company Opportunity Scorecard" reports and detailed multi-company ranking tables will be offered primarily as standalone premium digital products, available for separate purchase. (No timeframe on this yet)

• Please be patient. It will take time to get everything working, and I don’t know how long it will take. And I do not have anything to sell to you today or any promises of when it will be available.

• I will continue sharing free financial education posts when I can.

This will allow us to dedicate the immense resources required for this level of quality while continuing to provide high-value insights, foundational concepts, and timely market analysis through our regular free and tiered Substack posts.

Our core mission remains to empower you with intelligent, deeply researched investing insights. This evolution will help us sustain and even enhance the quality and depth of what we can offer.

We’re excited about the companies we're currently "getting on the green" and look forward to sharing more with you soon. As always, we value your engagement and insights.

I’m trying to create the service that I want for myself. This will take some time. Ideas include a Tradingview indicator with a score based on my research for the selected stock (if it’s been researched). Or, a specific indicator for each of the stocks that have high scores, and it would show how well it’s done in certain technical situations.

What are your thoughts on this comprehensive process? Any aspects you'd like to see us emphasize even more in future posts?

Let us know in the comments!

Stay sharp,

Jeremy

Disclaimer:

The information provided on this blog is for general informational purposes only and should not be considered professional financial advice. The content is based on the author’s opinions, research, and experiences, and is not tailored to any individual’s specific financial situation. I am not infallible and may be wrong in my assessments or predictions. Additionally, financial information and market conditions can change at any time, rendering the content outdated or inaccurate. Before making any financial decisions, please consult with a qualified financial advisor, accountant, or other professional who can provide advice suited to your personal circumstances.

Investing involves risks, including the potential loss of principal. Past performance is not indicative of future results. The author and this blog are not responsible for any financial losses or damages that may arise from actions taken based on the information provided. Any mention of specific investments, companies, or strategies does not constitute an endorsement or recommendation. Always conduct your own due diligence before making investment decisions.

Read the full disclaimer here.