Value investing made simple – a practical starting framework
Smarter than Bull & Bear.
In our first article we shared why elephantz exists and which problem we want to solve for private investors: markets are loud, information is scattered, and many people end up in spreadsheets and opinions instead of real orientation.
In this second article, we want to answer a very simple but important question:
How can you start investing in stocks in a more sensible way – without being a professional?
The foundation behind elephantz is the idea of Value Investing. But don’t worry – this is not about jargon. Think of this article as a calm, simple framework you can keep in mind when you look at a company.
What value investing really means (without the buzzwords)
Value investing became well-known through people like Benjamin Graham and Warren Buffett. But the core idea is surprisingly down‑to‑earth.
At its heart, it’s about three things:
You buy pieces of real businesses.
Not “lottery tickets” or tickers – but a share in a business model.You want to pay less than what you think the business is worth.
In short: Price < Value.You build in a margin of safety.
Because nobody can see the future, you deliberately leave yourself some room for error.
The principle is simple. The hard part is not the idea – it’s applying it in day‑to‑day life between news, emotions and time pressure.
To make this easier, it helps to have a small set of questions you ask yourself again and again.
A simple framework: 4 questions to anchor your thinking
There are endless metrics, models and opinions. But to get started, four core questions are often enough.
1. Do I actually understand what this business does?
Before you look at numbers, there is a very basic question:
Can I explain in one or two sentences how this company makes its money – and why customers pay for it?
If the honest answer is “no”, everything else becomes fragile. Metrics without understanding are like an X‑ray you can’t read.
You can ask yourself:
Is the business model roughly understandable?
Could I explain to a friend what this company does – without slides and without buzzwords?
Is there a clear value for the customer, or does it sound like buzzword bingo?
If you have a feeling of clarity here, the next steps become much easier.
2. Does the company look financially resilient?
The second question is:
Does this company look like it could get through tougher times?
We can’t know the future. But we can look at how a company has handled the past.
Signals that can help:
Does the company generate revenue and profit over several years, or is everything extremely jumpy?
Does the level of debt look manageable in relation to revenue/profit, or very high?
Does the company earn reasonable returns on the capital it uses, or does it tie up a lot of capital without much to show for it?
You don’t have to build a perfect model. The goal is a sense of quality and resilience, not the last percent of precision.
3. Does the current price roughly fit the picture I have?
Now we get to the classic value investing question:
Is the current market price, compared to my assessment of the business, cautious, ambitious or completely stretched?
Value investing does not mean “always buy the cheapest stocks”. It means you want to pay a reasonable price for a business you understand and believe is reasonably robust.
Very simplified:
High quality + fair price can be attractive.
Average quality + very low price can be an opportunity – but often also a trap.
High quality + extremely high price may mean a lot of future hope is already priced in.
The key idea: you want a buffer between what you pay and what you think the business is worth – a so‑called margin of safety.
This buffer protects you if:
your assessment is too optimistic, or
the world changes in ways you didn’t expect.
You will never know the “true” value of a company exactly. But you can avoid paying full price for obvious over‑excitement.
4. Does this investment fit me – and can I sleep at night?
The fourth question is often underestimated:
Does this investment fit me, my time horizon and my nerves?
Even the best analysis doesn’t help if you panic every time the price drops and sell at the worst possible moment.
You can ask yourself:
How long can I realistically leave this money invested?
How would I feel if this stock dropped 30% for a while – could I hold on?
Is this position size reasonable in my overall picture, or is it so big that it dominates my thoughts?
Value investing is not about avoiding volatility. It’s about being able to deal with it more calmly, because you know why you own something.
What this framework is not
Important: this 4‑question framework is not meant to be:
a guarantee of positive returns,
a replacement for your own thinking and responsibility,
or a shortcut to getting rich quickly.
What it can do:
protect you from blindly chasing hype,
help you make decisions more consciously,
make it easier to learn from mistakes, because you have a clear mental checklist.
How elephantz wants to make this framework usable
Many people don’t fail because they don’t understand the idea of value investing – but because it’s hard to apply in everyday life.
The reality often looks like this:
Limited time next to work and life.
Information scattered across many sites and PDFs.
Constant switching between metrics, news and opinions.
This is where the elephantz app wants to help:
It brings company data and market data together in one place.
It structures them along a clear analysis framework inspired by value investing.
It helps you judge quality, resilience and price more clearly – without telling you what to buy.
In short:
The app is being built to help you apply a framework like the one above faster and more calmly – so you have more time and energy for the actual decision.
What’s coming next
In the next articles we want to go deeper into some of these ideas:
Quality vs. price – why you need both, and how we think about that balance.
From metrics to decisions – how you move from numbers to a clearer “yes/no/too hard”.
How elephantz tries to visualise this – so that company analysis feels less like a spreadsheet and more like orientation.
If you’d like to follow along:
you can subscribe to this blog so new posts land directly in your inbox, and
you can visit elephantz if you want to stay in the loop for the beta of the app.
🐘 Clarity over noise. Orientation over hype.
Disclaimer: No investment advice. Content is for informational and educational purposes only.