A systematic approach to value investing following Charlie Munger's time-tested principles.
Visit the GitHub Pages site: https://ohmji.github.io/wwqi
This repository contains:
- Investment analyses following Charlie Munger's framework
- Systematic methodology for business evaluation
- Portfolio management tools and guidelines
- Mental models application in investment decisions
"It is remarkable how much long-term advantage people like us have gotten by trying to be consistently not stupid, instead of trying to be very intelligent." — Charlie Munger
WWQI follows Charlie Munger's investment principles:
- 🎯 Circle of Competence: Only invest in businesses you truly understand
- 🧠 Mental Models: Apply multidisciplinary thinking from psychology, economics, physics, biology
- 🛡️ Margin of Safety: Buy quality businesses at significant discounts to intrinsic value
- ⏳ Long-term Thinking: Hold great businesses for decades, not quarters
- 💎 Quality over Quantity: Concentrate on excellent opportunities rather than diversifying into mediocrity
wwqi/
├── README.md # This file
├── CLAUDE.md # Core investment philosophy and guidelines
├── INITIAL.md # Comprehensive research framework template
├── analysis/ # Current stock analysis files
│ ├── KO_analysis_20250920.md # Coca-Cola analysis example
│ ├──LULU_analysis_20250920.md # Lululemon analysis example
├── .claude/ # Claude Code configuration
├── data/ # Financial data and research (future)
Start by reading the core documents:
CLAUDE.md- Investment philosophy and mental models checklistINITIAL.md- Step-by-step research methodology and best practices
Use the comprehensive 13-section analysis framework:
- Snapshot - Key metrics overview
- Business Overview - Model, segments, geography
- Moat Analysis - Competitive advantages assessment
- Unit Economics - Business efficiency metrics
- Management Quality - Leadership and capital allocation
- Financial Quality - Balance sheet and cash flow analysis
- Valuation - DCF scenarios, relative valuation, margin of safety
- Risk Assessment - Permanent capital loss risks
- Catalysts - Growth drivers and milestones
- Portfolio Fit - Position sizing and correlation
- Decision - Clear buy/hold/watch/pass recommendation
- Open Questions - Items requiring further research
- Sources - Primary source citations
Review completed analyses for reference:
- Coca-Cola (KO): Classic dividend aristocrat with strong moats
- Lululemon (LULU): Premium brand facing growth challenges
- Moat Analysis: Sustainable competitive advantages?
- Brand strength and customer loyalty
- Network effects and switching costs
- Cost advantages and scale economics
- Regulatory barriers
- Management Quality: Competent, honest, shareholder-oriented?
- Financial Strength: Strong balance sheet, minimal debt?
- Predictable Earnings: Consistent cash flows over cycles?
- Pricing Power: Ability to raise prices without losing customers?
- Intrinsic Value: Multiple DCF scenarios (bear/base/bull)
- Reverse DCF: What growth is implied by current price?
- Relative Valuation: P/E, EV/EBITDA vs. historical averages
- Margin of Safety: Purchase price 30-50% below intrinsic value?
- Opportunity Cost: Compare against other investments
- Permanent Loss Risk: What could permanently impair capital?
- Industry Disruption: Technology or regulatory threats?
- Cyclical vs Secular: Temporary downturn or permanent decline?
- Leverage Risk: Debt levels and refinancing needs?
- Key Person Risk: Over-dependence on specific individuals?
- Incentive-Caused Bias: How do management incentives align?
- Confirmation Bias: Actively seek disconfirming evidence
- Social Proof: Think independently, don't follow crowds
- Supply and Demand: Industry dynamics and capacity utilization
- Scale Economics: Cost advantages from size
- Network Effects: Value increases with more users
- Compound Interest: The eighth wonder of the world
- Probability: Think in expected values and distributions
- Statistics: Understand regression to the mean
- Excellent business trading below intrinsic value
- Strong competitive position in growing market
- Competent management with skin in the game
- Multiple mental models confirm opportunity
- Fits within circle of competence
- Price significantly exceeds intrinsic value
- Business fundamentals permanently deteriorate
- Better opportunity emerges (opportunity cost)
- Investment thesis was wrong (admit mistakes quickly)
- Business continues to compound value
- Management executing well
- Competitive position intact
- Price remains below fair value
- Return on Invested Capital (ROIC)
- Free Cash Flow Generation
- Debt/Equity Ratios
- Revenue Growth Consistency
- Market Share Trends
- Customer Satisfaction Metrics
- Employee Retention Rates
- Competitive Position Indicators
- P/E Ratios vs. Historical Averages
- EV/EBITDA Multiple Trends
- Free Cash Flow Yield
- Dividend Coverage Ratios
- Annual Reports (10-K/20-F) - Read every word
- Quarterly Filings (10-Q/6-K) - Track trends
- Earnings Calls - Management tone and guidance
- Shareholder Letters - Long-term vision
- Industry Publications - Competitive landscape
- Frequent accounting changes
- High executive turnover
- Declining margins despite scale growth
- Excessive acquisition activity
- Poor capital allocation history
- Start with Primary Sources: Company filings before analyst reports
- Seek Disconfirming Evidence: Challenge your thesis actively
- Document Assumptions: Mark estimates vs. facts clearly
- Cite Everything: Link to specific sources and page numbers
- Think Long-term: Focus on 5-10 year business trajectory
- Circle of Competence: Only analyze businesses you understand
- Margin of Safety: Require 30-50% discount for purchases
- Quality Focus: Prefer excellent businesses at fair prices
- Position Sizing: Concentrate in best ideas (5-10 positions)
- Patience: Great opportunities are rare
- Version Control: Date all analyses, track thesis changes
- Clear Citations: Link every claim to primary sources
- Visible Math: Show calculations, don't just state conclusions
- Regular Reviews: Schedule thesis updates as companies evolve
- Copy the template from
INITIAL.md - Fill in company parameters (ticker, sector, etc.)
- Gather primary sources (10-K, earnings calls)
- Work through each section systematically
- Apply mental models throughout analysis
- Calculate multiple valuation scenarios
- Make clear investment decision with reasoning
- Check key metrics against original thesis
- Update financial projections with new data
- Reassess competitive position and moats
- Evaluate management execution
- Recalculate intrinsic value estimates
- Confirm position sizing still appropriate
This framework is designed for continuous improvement. Contributions welcome:
- Additional mental model applications
- Enhanced valuation methodologies
- Real-world case study examples
- Risk assessment frameworks
- Portfolio management tools
- Warren Buffett Letters to Shareholders
- Charlie Munger Speeches and Writings
- "Poor Charlie's Almanack"
- "The Intelligent Investor" by Benjamin Graham
- "Security Analysis" by Graham & Dodd
- SEC EDGAR Database - Primary source filings
- Company Investor Relations - Management presentations
- Industry Trade Publications - Competitive insights
- Financial Statement Analysis Software
- DCF Modeling Spreadsheets
This framework is for educational and informational purposes only. It does not constitute investment advice or recommendations. Past performance does not guarantee future results. Always consult with qualified financial professionals before making investment decisions.
"The big money is not in the buying and selling, but in the waiting." - Charlie Munger
Remember: The goal is not to be clever, but to be consistently rational and avoid permanent loss of capital while allowing great businesses to compound over time.