FRAMEWORKS / VALUE
LENS 01 · VALUE · 4 FRAMEWORKS
Cheapness with a margin of safety
Four ways of asking the same question — is this business worth clearly more than it trades for? — from statistical net-nets to durable-moat franchises.
Deep Value (Net-Net)
IN THE TRADITION OF BENJAMIN GRAHAM'S SECURITY ANALYSIS AND THE DIVERSIFIED PRACTICE OF WALTER SCHLOSS
Statistical bargains: companies trading below a conservative estimate of net current asset value. The tradition documents a diversified, multi-year workout horizon — companies surfaced here typically look distressed, because that's precisely what the screen selects for.
Discount to net current asset value, cash-burn ceiling, a going-concern operating business — not a shell.
Whether the assets are real and realizable, dilution and delisting risk, and reasons the discount is deserved.
Quality-Value Rank
IN THE TRADITION OF JOEL GREENBLATT'S PUBLISHED RANK METHODOLOGY
Every company ranked on two measures — earnings yield (cheap) and return on capital (good) — and combined into one list. Stage 2's only job is to verify the numbers behind the rank are trustworthy, not to second-guess the ranking.
The combined rank across the universe: earnings yield plus return on capital, sector exclusions applied.
Whether the numbers behind the rank hold up — stale data, accounting distortions, one-time earnings that inflate the score.
Moat Value: Pricing Power
IN THE TRADITION OF GRAHAM'S MARGIN OF SAFETY AND THE QUALITY-FRANCHISE APPROACH ASSOCIATED WITH BUFFETT AND MUNGER
Durable-moat value focused on one moat type: the ability to raise prices ahead of inflation without losing volume. Inversion-driven — it searches for reasons not to own first.
Sustained return on capital, gross-margin stability through cost cycles, balance-sheet strength.
Evidence of price realization in MD&A, switching costs and brand in the business description, owner-earnings quality.
Moat Value: Scale Economics
IN THE TRADITION OF GRAHAM'S MARGIN OF SAFETY AND THE QUALITY-FRANCHISE APPROACH ASSOCIATED WITH BUFFETT AND MUNGER
The mirror image of Pricing Power: businesses that win by being the lowest-cost producer and share scale gains with customers to deepen the advantage.
Unit-cost advantage signatures: sustained return on capital with a different margin shape than pricing-power moats.
Whether scale gains are shared with customers or harvested, reinvestment discipline, and threats to the cost position.
Every framework on this page can be forked in the Strategy Lab — forking copies a built-in framework into your own editable version, so you can adjust its screening criteria without changing the original. Framework titles describe the method; practitioner names appear only as attribution — no methodology here is endorsed by or affiliated with the practitioners named.