Our Philosophy

The Equity Toolkit aims to organise the vast repository of investing theory and anecdote in a way that makes it easier for investors to incorporate this information into a personal investment framework.

This organisation relies on five ideas.

To attain knowledge, add things everyday. To attain wisdom, remove things everyday.

Lao Tse


There is a difference between knowledge and understanding.  A University degree or CFA qualification teaches knowledge – the names and numbers of financial analysis.  But it doesn’t teach understanding – how do these concepts apply in the real world?  The Equity Toolkit is not about just knowing the tools of equity analysis, or even understanding how to apply these tools. Rather, it aims to offer a means by which analysts can develop a framework for analysis and investing that suits their individual personalities, resources and objectives.

We refer to this as The Analysis Problem

I constantly see people rise in life who are not the smartest, sometimes not even the most diligent, but they are learning machines. They go to bed every night a little wiser than they were when they got up and boy does that help, particularly when you have a long run ahead of you.

Charles T. Munger


Building an investing framework doesn’t come about by accident.  It requires both a desire to learn and a willingness to incorporate that learning into the way you act.  Without this deliberate approach to constant improvement, knowledge builds up without a correspondence improvement in wisdom.

We refer to this as the Framework Foundation

Life is just one damn relatedness after another.

Julian Huxley


Equity analysis is not about solving  a distinct, well defined problem. Rather, it is about trying to understand the behavior of a complex adaptive system.  Systems are more than the sum of their parts.  As a result, the holistic approach needed to analyse the behaviour of the system is distinct from the reductionist approach that we might use to understand certain elements within the system.

We refer to this as The System Solution

I suppose it is tempting, if the only tool you have is a hammer, to treat everything as if it were a nail.

Abraham Maslow


The best way to develop a framework capable of understanding the system is to have a broad set of tools or mental models.  This approach is not original or unique.  It is also ironic – the belief that there is no one right answer or tool to every problem, is essentially a belief that the single correct approach is to have a broad toolkit!

We refer to this as The Toolkit Approach and it is the core of The Equity Toolkit.

Things should be made as simple as possible. But no simpler.

Albert Einstein

In integrating these tools into an investment framework and applying them in analysing the system, the objective must always be to keep things as simple as possible.  But simplicity must be a search for the essence of the problem, rather than a desire to ignore difficult complications.

We call this The Simplicity Standard