Investment School
Decades of wisdom from Graham, Buffett, and Munger — translated for the real world.
TODAY'S SIGNAL
SET trading at P/E 15.4 — 13.9% below the historical average of 17.89. Moderately valued.
NEUTRAL at 50/100 — Neither cheap nor expensive. Wait for a clear signal before adding positions.
Margin of SafetyGraham's central principle▾
Margin of Safety
Graham's central principle
Buy a stock only when its price is significantly below what it is actually worth — so you are protected even if your analysis is wrong.
CURRENT SIGNAL
Graham Number is a stock's fair value ceiling. A 30%+ gap between price and Graham Number = strong safety.
If you calculate that a company is worth ฿100 but its stock trades at ฿65, you have a 35% margin of safety. Graham said: always demand at least 25–33%. This cushion protects you against calculation errors, unexpected bad news, or just being wrong.
“The margin of safety is always dependent on the price paid. It will be large at one price, small at some higher price, nonexistent at some still higher price.”
Benjamin Graham, The Intelligent Investor
Mr. MarketGraham's emotional market metaphor▾
Mr. Market
Graham's emotional market metaphor
Imagine the stock market as a moody business partner who offers to buy or sell your stake every day — at wildly irrational prices. Your job is to exploit his mood swings, not follow them.
CURRENT SIGNAL
Mr. Market today: see the Fear & Greed dial on the Pulse screen for his current mood.
When Mr. Market is panicked (Fear & Greed below 25), prices are often irrationally low — that is when Graham and Buffett buy. When he is euphoric (above 75), prices are often irrationally high — that is when they hold cash. The key: you never have to trade with him. You only trade when his price is better than fair.
“Mr. Market is there to serve you, not to guide you. It is his pocketbook, not his wisdom, that you will find useful.”
Benjamin Graham, The Intelligent Investor
Economic MoatBuffett's competitive advantage framework▾
Economic Moat
Buffett's competitive advantage framework
A sustainable business advantage that protects a company from competition the way a moat protects a castle. Without a moat, any profit eventually attracts competition until it disappears.
CURRENT SIGNAL
4 moat types: Cost Advantage, Switching Costs, Network Effect, Intangible Assets (brand, patent, license). Wide moat = durable profit for 10+ years.
Thai examples: ADVANC has switching costs (you rarely change your phone carrier). AOT (Airports of Thailand) has regulatory scale — nobody builds a competing international airport. CPALL has network effects across 14,000+ 7-Eleven stores. These moats are why Buffett prefers holding periods of 10+ years.
“The key to investing is not assessing how much an industry is going to affect society, or how much it will grow, but rather determining the competitive advantage of any given company and, above all, the durability of that advantage.”
Warren Buffett, Fortune Magazine, 1999
Shiller CAPE RatioThe 10-year market valuation signal▾
Shiller CAPE Ratio
The 10-year market valuation signal
CAPE (Cyclically Adjusted P/E) divides the S&P 500 price by its average earnings over the past 10 years, adjusted for inflation. High CAPE = expensive market = poor future 10-year returns.
CURRENT SIGNAL
Current CAPE: 34.2 (historical median: 16). Levels above 35 have historically preceded corrections.
CAPE above 30 has historically predicted poor 10-year forward returns (2–4% per year). CAPE below 15 has predicted excellent returns (10–12% per year). At 34.2, the US market is expensive by this measure. Thailand's SET P/E at 15.4 is closer to fair value — which is partly why SET may outperform US stocks over the next decade.
“The stock market is filled with individuals who know the price of everything, but the value of nothing.”
Philip Fisher (via Warren Buffett)
Circle of CompetenceMunger's risk management principle▾
Circle of Competence
Munger's risk management principle
Only invest in businesses you deeply understand. If you cannot explain how a company makes money in two minutes, it is outside your circle — and you are betting, not investing.
CURRENT SIGNAL
Start with industries you know: retail, banking, telecom, real estate. Add others only after you understand their economics.
Munger's version of this: avoiding known failure modes is more reliable than finding unknown success. If you use 7-Eleven every day, you have an edge in understanding CPALL's business. If you have a KBank account, you understand retail banking better than most analysts who have never lived in Thailand. Start in your circle, expand it slowly.
“All I want to know is where I'm going to die, so I'll never go there.”
Charlie Munger
SOURCE MATERIAL
The Intelligent Investor — Benjamin Graham (1949) · Berkshire Hathaway Annual Letters — Warren Buffett (1965–2025) · Poor Charlie's Almanack — Charlie Munger