Aboard the Anima  ·  On deck, beside the helm

The Binnacle

The brass housing that keeps the compass dry and lit. Whatever the weather, it points the same way.

… the compass still rotated true, still found north with the same quiet certainty it had always carried — but the housing around it had taken the storm badly. What had left harbour as polished brass, warm and gold in the morning light, was now a dull, salt-encrusted object, green at every seam and corner.

From Anima  ·  Chapter 4, Knowing the Business
The compass card

Boxing the compass

Every apprentice learned to name all 32 points in order. Set a bearing and the card will name it.

32 points of 11.25° each. The gold mark is the lubber line: the ship's heading.

The binnacle's instruments

A bearing on value

A compass tells you direction. It cannot tell you what a thing is worth. For that, the old navigators of value left these rules.

Graham Number An old pilot's rule for the most a careful buyer should pay for a share. Open instrument → Discounted Cash Flow Bring tomorrow's cargo back to today's harbour and weigh it honestly. Open instrument → P/E & P/B Ratios Two classic soundings of price against earnings and substance. Open instrument →
From the log
How to Estimate Intrinsic Value: A Step-by-Step DCF Example Free cash flow, growth, discount rate and terminal value, worked through by hand. Value Investing 101 Price and value, margin of safety, the Graham Number, DCF, P/E and P/B in plain words.
Anima — The Most Important Investment, 2nd edition
The ship in the book

Anima
The Most Important Investment

A compass, a chart, and a young apprentice learning to read both. The voyage is in the book.

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These are instruments, not advice. Numbers chart a course; they do not sail it for you. All calculators give estimates for education only. Check important decisions with a qualified professional.