Portfolio Risk & Valuation

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Valuation

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Risk Profile

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Qualitative

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Management: --

Operator's Guide (Read Before Trading)

Do not ignore these definitions. Your memory is unreliable under stress.

1. The Margin of Safety

Never buy without a discount to intrinsic value. If you cannot calculate the intrinsic value, you are gambling, not investing. A 30% margin is the minimum requirement for this portfolio.

2. The Debt Trap

High debt kills companies during downturns. If Debt/Equity is > 2.0 or Net Debt/EBITDA is > 3.0, the stock is disqualified regardless of the growth story.

3. Free Cash Flow (FCF)

Earnings can be manipulated; cash cannot. Focus on FCF Yield. If the company is not generating cash, how will it fund the buybacks or dividends you are hoping for?

4. Sell Discipline

Sell when the thesis breaks or the valuation becomes absurd (e.g., PEG > 3.0). Do not hold "hoping" for a turnaround without data.