Learn investing
Every lesson is short, cited, and written to be argued with. Nothing here tells you what to buy.
Foundations
What a share is, what a market does, and why any of it moves.
Reading the numbers
Statements, ratios and the arithmetic behind every figure Pythia shows.
- Valuation ratios — what you are payingP/E, EV/EBIT, free-cash-flow yield and book-to-market answer one question in four ways - how much are you paying for each dollar of what the business produces?7 min
- Profitability and returns on capitalMargins tell you what the business keeps from a sale; returns on capital tell you what it earns on the money tied up in it. The second is the one that compounds.7 min
- Balance-sheet health and survivalSafety metrics ask one question - can this company keep its promises in a bad year? Interest coverage, leverage, liquidity and earnings quality are the four ways of asking it.7 min
- Growth and momentum are not the same thingGrowth is what the business did; momentum is what the stock did. Pythia scores them in separate pillars so a good company in a drawdown is not mislabelled as a bad one.7 min
- Glossary — the shorthand, decodedEvery abbreviation Pythia uses in tables, score drill-ins and screener columns, defined once, with a link to a fuller definition for each.5 min
Investor frameworks
The published models — Graham, Buffett, Greenblatt, Lynch — and their limits.
- The Graham Number and NCAVBenjamin Graham's two defensive value tests — a ceiling price built from earnings and book value, and the liquidation-value floor he called a net-net.5 min
- The Piotroski F-ScoreNine pass-or-fail accounting tests that separate improving businesses from deteriorating ones — built for value stocks, where the cheap and the broken look alike.5 min
- The Altman Z-ScoreA five-ratio bankruptcy model from 1968 that still works — provided you use the variant built for the kind of company you are pointing it at.5 min
- The Beneish M-Score — detecting manipulated earningsEight ratios that together flag a higher-than-usual probability that reported earnings have been manipulated. It is a screening signal about accounting, not a fraud verdict.6 min
- Greenblatt Rank — quality and cheapness togetherJoel Greenblatt's two-factor ranking pairs return on capital with earnings yield, on the argument that either one alone selects a trap.5 min
- Buffett — ROE, ROIC, the dollar test and owner earningsFour measures Buffett returns to in the Berkshire letters, and what each is actually asking about a business rather than about its share price.6 min
- The two Buffetts — partnership era and moat eraBefore wonderful businesses at fair prices, Buffett ran a Graham-school deep-value partnership buying statistically cheap securities and special situations. The two playbooks screen for almost opposite things.6 min
- Lynch — PEG, fair value, and the six categoriesPeter Lynch's growth-at-a-reasonable-price rules, including the one most people skip — that the rules only apply to some of the six kinds of company he defined.6 min
- DuPont — what actually drives return on equityA 1919 identity that splits ROE into margin, asset turnover and leverage, so you can see whether a high return is earned by the business or manufactured by the balance sheet.6 min
- Porter — a moat is a structure, not an adjectiveCompetitive advantage is durable only when something structural protects it. In the numbers that shows up as persistence - margins and returns on capital that stay high for years rather than one good cycle.6 min
- Gardner — the growth counterweightDavid Gardner's six signs of a disruptive winner favour early leaders in emerging industries with strong price leadership and high margins. It is the deliberate counterweight to a bench of value frameworks.6 min
- Permanent capital — preservation before performanceA multigenerational frame in which the first objective is never losing capital permanently. It changes what you screen for - resilience, balance-sheet durability and dividend persistence over growth rate.6 min
- Sleep — scale economies sharedA qualitative durability idea rather than a computed score - the sturdiest businesses hand their scale savings to customers, which grows the moat instead of the margin. Worth understanding precisely because it does not show up in the ratios.5 min
How Pythia scores
Every score we compute, its inputs, and how to argue with it.
- PAS — the Pythia Academic ScoreA sector-neutral 0-100 composite of five pillars, built so that a score compares a company to its own peers rather than to the whole market.6 min
- The 22 inputs behind a PASEvery input that feeds the Pythia Academic Score, grouped by pillar, with what each one measures and what happens when one is missing.6 min
- PGS and the guru pyramidTwo related things people mix up - the 0-100 Pythia Guru Score over 14 hurdles, and the 18-signal pyramid that sorts the universe into four tiers. This explains both and how they differ.7 min
- Best Match — which investor would recognise this companyThe Best Match badge names the guru archetype a company fits most strongly. It is a description of fit, not a recommendation, and the small archetypes are easier to max out than the large ones.5 min
- The legacy v2 scores, and why they are still hereThe Composite plus Quality, Value, Growth and Safety card is the original v2 pipeline. It is kept as a sanity check while PAS carries the headline, and this explains what it does differently.4 min
Judgment & behaviour
The evidence on how investors actually decide, and how to decide better.
- The disposition effect — selling winners, keeping losersIndividual investors sell their gains and hold their losses, at a rate too large to be chance and in the direction that costs them money. It is the best-measured mistake in retail investing.7 min
- Base rates and the outside viewBefore asking what makes this company special, ask what usually happens to companies like it. The outside view is the cheapest correction available to an investor.7 min
- Judging the decision, not the resultA good outcome does not prove a good decision, and one bad quarter does not refute a thesis. In a domain this noisy, the only thing you can actually improve is the process.6 min
- Overconfidence, and what it costs in tradingInvestors who are more certain trade more, and trading more is reliably associated with worse net returns. The clearest evidence in behavioural finance is about activity, not stock-picking.6 min
- Calibration — being right about how right you areA forecaster is calibrated when the things they call 70% likely happen about 70% of the time. It is measurable, it is trainable, and it is a different skill from being smart.7 min
- Stories, and the evidence you go looking forA coherent story raises confidence more than evidence raises accuracy, and once you hold a view you search asymmetrically. Both are cheap to correct if you know the shape of them.6 min