Investor model library
Six investor models for reading a stock
This is not a biography section. Use Graham, Klarman, Marks, Munger, Lynch, and Druckenmiller as six lenses: downside, discount, cycle, quality, growth, and macro confirmation. Start with the model that matches the question in front of you.
Choose The Right Model
Match the question to a model first. Hover a row to compare what it checks, what data it needs, and where it tends to fail.
| Model | Priority | Data needed | Best fit | Weak spot |
|---|---|---|---|---|
| Graham | Valuation and downside protection | Balance sheet, normalized earnings, cash conversion | Mature value stocks, cyclical selloffs, net-cash businesses | Asset-light compounders and intangible-heavy growth |
| Klarman | Discount source and downside map | Liquidity, refinancing risk, catalyst quality, position size | Special situations, distress, unpopular sectors | Clean secular growth where margin of safety is less visible |
| Marks | Cycle position and market psychology | Rates, credit, liquidity, crowding, expectations | Cyclicals, credit-sensitive stocks, crowded themes | Company-specific operating detail and durable secular trends |
| Munger | Moat, returns on capital, and reinvestment runway | Pricing power, ROIC, margins, retention, capital allocation | Quality compounders, platforms, brands, software | Overpaying for quality or ignoring moat erosion |
| Lynch | Growth story and unit economics | Revenue growth, margin trend, store or user growth, PEG | Consumer, retail, product-led and category-growth stocks | Familiar products with saturated growth or rich valuation |
| Druckenmiller | Macro regime, leadership, and asymmetry | Rates, liquidity, earnings revisions, relative strength | Macro rotations, AI capex waves, leadership shifts | Weak risk controls or a correct macro view with wrong timing |
All Investor Models
Each page turns one investor's method into a checklist you can use with forecasts, filings, earnings, and peer comparisons.
Value and downside models
These models ask what could go wrong, whether price compensates for risk, and where protection comes from.
Benjamin Graham Margin of Safety Model
A practical Graham-style model that scores balance sheet safety, normalized earnings, cash conversion, valuation discount, downside protection, and catalyst patience.
Seth Klarman Downside-First Model
A Klarman-style model that scores discount source, downside map, liquidity, catalyst quality, position sizing, and opportunity cost.
Howard Marks Cycle and Risk Model
A Marks-style model that scores cycle position, market psychology, embedded expectations, risk compensation, liquidity, and crowding.
Quality, growth, and opportunity models
These models focus on durable business quality, expanding runways, and asymmetric upside.
Charlie Munger Quality Compounder Model
A Munger-style model that scores moat durability, return on capital, pricing power, reinvestment runway, management quality, and valuation discipline.
Peter Lynch Growth Story Model
A Lynch-style model that converts product familiarity into a scored growth, unit economics, runway, valuation, and category-fit test.
Stanley Druckenmiller Macro Conviction Model
A Druckenmiller-style model that scores macro regime, leadership confirmation, earnings revisions, asymmetry, risk limits, and update speed.
Common Questions
Use these answers to choose the right model before opening a specific article.
How should I choose an investor model?
Start with the question you are trying to answer. Use Graham or Klarman for downside and discount questions, Munger for business quality, Lynch for growth durability, Marks for cycle and market psychology, and Druckenmiller for macro regime and leadership shifts.
When is Graham better than Munger?
Use Graham first when the main issue is balance-sheet protection, normalized earnings, tangible value, or permanent-loss risk. Use Munger when the business already looks strong and the harder question is moat durability, pricing power, ROIC, and reinvestment runway.
When should I use Lynch instead of Munger?
Use Lynch when the stock depends on a growth story you can verify through units, stores, users, categories, margins, or PEG. Use Munger when the core question is whether the business can compound for a long time without needing constant reinvention.
When does a Marks model matter most?
Use Marks when the outcome depends on cycle position, credit conditions, liquidity, crowding, or investor psychology. It is especially useful when a company looks statistically cheap or expensive but the bigger force is the market environment around it.
When should I use Druckenmiller instead of Marks?
Use Druckenmiller when the key question is leadership, trend strength, liquidity, and asymmetric timing. Marks helps you ask where we are in the cycle; Druckenmiller helps you ask whether the current leader still has enough evidence and risk-reward to press the trade.
Can I use more than one model on the same stock?
Yes. A mature value stock may start with Graham for margin of safety and then use Marks for cycle risk. A quality growth stock may start with Munger for moat and then use Lynch to test whether growth still justifies valuation.
Do these models give buy or sell signals?
No. They are research models, not automatic trading rules. Their job is to decide which variables to check, what evidence would confirm the thesis, and what would invalidate it before you think about position size or timing.