WMTWalmart

Fact → Principle → Simulation

• 🟢Daily volatility (ATR): 1.9% of price — Housel's core point: the boring, low-volatility holding is the one you can actually stay invested in long enough to compound.
• 🟢Free cash flow growth: 17.9% — Steady, real cash generation is quiet compounding in action — no story required.
• 🟢Debt/Equity: 0.38 — Financial fragility is what turns a bad year into a forced sale — Housel's 'room for error' principle.

Fact → Principle → Simulation

• 🟢Dividend payments on record: 39 — Smith's central finding was that stocks with reinvested dividends beat bonds over time — a real dividend record is the evidence.
• 🟡Revenue growth: 4.7% — Sustained, real growth is what compounds a long-term holding's value over a decade.
• 🟢Operating margin is stable or improving — A stable, patient holding shouldn't need its margins to be rescued year after year.
• 🟢Debt/Equity: 0.38 — A conservative balance sheet is what lets a holding survive a full decade, including its bad years.

Fact → Principle → Simulation

• 🟢Net income growth (12.6%) vs. revenue growth (4.7%) — Veblen distinguished real industrial value creation from growth pursued for its own sake — profit should keep pace with revenue, not lag it.
• 🔴Recent insider transactions: 0 buys, 10 sells — Whether management is putting its own money behind the growth story is a real, hard-to-fake signal.
• 🟢Operating margin is stable or improving — Real efficiency gains, not just top-line expansion, is what separates production from mere 'business.'
• 🟢Return on equity: 22.0% — Real, moderate-to-strong returns on capital — not so extreme as to suggest it's leverage-driven rather than operational.

Fact → Principle → Simulation

• 🟢Distance above 200-day average: -10.1% — Mackay's delusions always shared one trait: prices detached from any reasonable anchor.
• 🟢RSI(14): 46 — An extreme, sustained RSI is one signature of a crowd already 'all in.'
• 🔴News sentiment score: 92/100 — Near-universal enthusiasm in the coverage is exactly the pattern that preceded every mania Mackay documented.
• 🟢12-period rate of change: +0.8% — A sudden, sharp acceleration is more consistent with mania than with steady, sustainable demand.
• 🔴Price vs. estimated fair value: +284% — A large premium to any reasonable estimate of value is the hallmark of a delusion in progress.

Fact → Principle → Simulation

• 🟢Distance from 200-day average: -10.1% — Marks' cycle framework treats distance from a long-term anchor as the clearest single cycle-position signal.
• 🟢RSI(14): 46 — An extended oscillator reading is one more sign of a late-cycle position, not early.
• 🟡3-month relative strength vs. S&P 500: -10.9pp — Wild outperformance or underperformance vs. the broad market often marks a crowded, late-cycle trade.
• 🔴News sentiment score: 92/100 — Marks: risk is highest exactly when everyone agrees things look great.

Fact → Principle → Simulation

• 🟡Composite risk score: 56/100 — Loeb's rule was capital preservation first — missing a gain is far better than absorbing a large loss.
• 🟢Daily volatility (ATR): 1.9% of price — Loeb watched volatility closely — a wild swinger is a much harder position to cut losses on cleanly.
• 🟢Debt/Equity: 0.38 — Leverage is the single fastest way to turn a manageable drawdown into a permanent loss of capital.
• 🔴Current ratio: 0.79 — A cushion of short-term liquidity is part of what keeps a losing position from becoming forced selling.

Fact → Principle → Simulation

• 🟡RSI(14): 46 — Nelson read cyclical exhaustion and renewal in price oscillation, not just trend direction.
• 🟡Stochastic %K: 56 — A cycle nearing its low end offers more room to move than one already stretched to its high end.
• 🟡Williams %R: -44 — A second, independent read on the same overbought/oversold question.
• 🟡CCI(20): 42 — An extreme reading here is exactly the kind of cyclical extension Nelson's method watched for.
• 🟡Bollinger %B: 0.60 — Position within the recent trading range, a purely statistical cycle marker.

Fact → Principle → Simulation

• 🔴ADX(14): 12 — Schwager's wizards consistently avoided directionless chop — a real, tradeable trend is the precondition.
• 🟢Reward/risk to resistance vs. support: 2.48 — Schwager's central lesson: trade setups with real, favorable reward-to-risk, not just a hunch about direction.
• 🟡Volume vs. 20-day average: 0.97x — Real conviction shows up in volume — a setup without it is a much weaker bet.
• 🟢Market structure: downtrend — A defined trend gives a real setup to trade; a range is exactly what disciplined traders wait out.

Fact → Principle → Simulation

• 🟡Composite risk score: 56/100 — Marks' central argument is that risk-awareness matters more than raw return-seeking.
• 🔴Price vs. estimated fair value: +284% — Second-level thinking asks whether optimism is already priced in, not just whether the story is good.
• 🟢Distance above 200-day average: -10.1% — A stock far above its long-term average is one where the crowd has likely already gotten excited — worth extra caution, not extra conviction.
• 🔴News sentiment score: 92/100 — Marks is explicitly wary when sentiment is near-universally positive — that's exactly when expectations get hardest to beat.
• 🟢Debt/Equity: 0.38 — Leverage amplifies whatever the cycle does next, for better or worse — a risk factor Marks weighs explicitly.

Fact → Principle → Simulation

• 🟡Spread across the other methodologies' scores: ±21 points — Real, independent methodologies converging on a similar view is weak evidence of a genuine, findable edge — wide disagreement suggests there isn't one.
• 🔴Average conviction away from neutral: 3 points — A near-neutral average is exactly the case Malkiel/Bogle expect most stocks to be — no strong signal to act on.
• 🟢Average real-data availability: 95% — A case built on real, available data is at least a fair test — one built on missing data is no case at all.

Fact → Principle → Simulation

• 🟢Operating margin: 4.0% -> 4.2% — A stable or widening margin over time is a real (if partial) proxy for the durable competitive advantage Fisher's qualitative research aimed to find.
• 🔴Revenue growth: 4.7% — Fisher sought companies with above-average, sustainable sales growth.
• 🟢Free cash flow growth: 17.9% — Growth funded by real, growing cash generation (not just accounting earnings) is a stronger Fisher-style signal.
• 🔴Net margin: 3.1% — High absolute profitability is a rough proxy for pricing power, one of the qualities Fisher's interviews aimed to uncover.

Fact → Principle → Simulation

• 🔴Current ratio: 0.79 — Bagehot's core concern was whether short-term obligations can be met without a fire sale.
• 🔴Quick ratio: 0.24 — A stricter liquidity test excluding inventory — closer to real, immediately available cash cover.
• 🟢Debt/Equity: 0.38 — Heavy leverage is exactly what turns a temporary liquidity problem into insolvency.
• 🟢Interest coverage: 12.9x — How many times over operating earnings cover the interest bill — a direct read on credit stress.

Fact → Principle → Simulation

• 🔴PEG ratio: 2.93 (P/E 39.0 / EPS growth 13%) — Lynch's core test: a PEG under 1 is attractive, under 0.5 is excellent — growth the price hasn't caught up to.
• 🟡EPS growth: 13.3% — Lynch's 'fast growers' category specifically sought strong, sustained EPS growth.
• 🔴Revenue growth: 4.7% — Real, growing revenue backs up a growth story rather than just margin expansion.
• 🟢Operating margin is stable or improving — Lynch preferred a growth story that isn't being bought with shrinking margins.
• 🟢Debt/Equity: 0.38 — Lynch was wary of fast growers propped up by heavy debt.

Fact → Principle → Simulation

• 🔴Market structure: downtrend — Livermore's first rule: trade with the established trend, not against it.
• 🔴ADX(14): 12 — A strong trend (not a directionless chop) is exactly the setup Livermore waited for.
• 🟢MACD histogram: 0.36 — Positive momentum confirmation supports staying with the trend.
• 🟡12-period rate of change: +0.8% — Livermore read price momentum itself as the most reliable signal available.
• 🟡Volume vs. 20-day average: 0.97x — Livermore looked for volume confirming a move, not a thin, unconvincing rally.

Fact → Principle → Simulation

• 🔴P/E ratio: 39.0 — Graham's defensive investor favored a moderate P/E, historically around 15x or less.
• 🔴Price/Book: 8.59 — Graham's classic screen preferred price no more than ~1.5x book value.
• 🔴Margin of safety vs. estimated fair value: -284% (relative to fair value, not price — a different basis than the "Gap" % shown in Fair Value) — The margin of safety — buying meaningfully below estimated intrinsic value — is Graham's central idea.
• 🔴Current ratio: 0.79 — Graham's defensive investor required strong short-term financial condition, roughly 2:1 or better.
• 🟢Debt/Equity: 0.38 — Graham avoided companies with heavy debt loads relative to equity.

Fact → Principle → Simulation

• 🔴Price/Book: 8.59 — The Enterprising Investor accepts a deeper, more aggressive book-value discount than the Defensive screen requires.
• 🔴P/E ratio: 39.0 — Statistically cheap earnings, a looser bar than the Defensive screen's ~15x ceiling.
• 🔴Current ratio: 0.79 — Still tracked, but the Enterprising Investor will tolerate a weaker safety margin for a deep enough discount.