Methodology

Deal-breaker caps

Each of our 7 frameworks has a documented list of hard red flags. When one fires, the LETTER GRADE gets capped no matter how high the pillar-weighted score, so a 78/100 Munger fit with 4x net debt drops to C, with the reason on the page.

documented caps

frameworks

scoring engine

Last reviewed: May 19, 2026

In one paragraph

invest-like.com's pillar scorers produce a 0-100 weighted average. That's elegant for "more is better" curves, but a stock can score 78 on Munger's weighted average while quietly failing his "almost no debt" non-negotiable. invest-like.com's deal-breaker caps catch those: every framework lists what its author would flag as immediately disqualifying. When a cap fires, invest-like.com drops the grade and shows a human-readable reason on the verdict page. The pass count + pillar reasoning stay transparent; only the LETTER MOVES.

The caps, per philosophy

Each cap names the failure mode invest-like.com catches. The rule itself, the grade it caps to, and the prose justification come straight from invest-like.com's open scoring code at lib/scoring/deal-breakers.ts.

Warren Buffett

5 documented caps

low_roiccap → D
ROIC under 8% on both TTM and 5y average, business doesn't earn enough on capital invested
negative_ttm_roiccap → D
ROIC negative on the most recent TTM, currently losing money on capital deployed regardless of historical averages
heavy_dilutioncap → C
Share count growing by more than 3%/year over 5y, dilutes future per-share value
cyclical_flameoutcap → C
EPS dropped more than 50% at the worst point in the last 5 years, cyclical or fragile
high_debtcap → C
Net debt is more than 5x EBITDA, balance sheet is stretched

Benjamin Graham

2 documented caps

extreme_debtcap → C
Net debt over 8x EBITDA: even Graham's margin of safety can't survive this
persistent_lossescap → D
Net income negative for most of the last 5 years, Graham required earnings stability

Philip Fisher

3 documented caps

no_growth_runwaycap → D
Revenue contracting over 5y, Fisher's thesis requires a sustained growth runway, not decline
low_roiccap → C
ROIC under 10% on both TTM and 5y, Fisher demanded high reinvestment economics, not commodity returns
heavy_dilutioncap → C
Share count growing >4%/year over 5y, per-share growth eaten by dilution

Peter Lynch

3 documented caps

heavy_dilutioncap → C
Share count growing >5%/year, per-share growth eaten by dilution (kills Lynch's whole thesis)
shrinking_epscap → D
EPS CAGR negative over 5y: Lynch's framework requires growth, not decline
extreme_debtcap → C
Net debt over 5x EBITDA: too leveraged to sustain growth investments

Joel Greenblatt

2 documented caps

low_roic_greenblattcap → D
ROIC under 10% on both TTM and 5y, Greenblatt's Magic Formula explicitly screens for high ROIC
low_ebit_yieldcap → C
EV/EBIT over 30 means EBIT yield below ~3%, too expensive to qualify for Magic Formula

Charlie Munger

4 documented caps

below_munger_roic_floorcap → D
ROIC under 12% on both TTM and 5y, Munger's wonderful-business floor was 18%, this isn't close
leveraged_for_mungercap → C
Net debt over 3x EBITDA: Munger wanted 'almost no debt'; this disqualifies the wonderful-business call
persistent_lossescap → D
Net income negative for most of the last 5 years, not the durable compounder Munger held forever
cyclical_for_mungercap → C
EPS dropped more than 40% in the last 5 years, Munger avoided businesses that bleed in downturns

Terry Smith

4 documented caps

below_smith_roce_floorcap → D
ROIC under 15% on both TTM and 5y, Smith's hard floor is 20%, this isn't a Fundsmith candidate
weak_fcf_conversioncap → C
FCF/Net income under 0.7, Smith's 'owner earnings = reported earnings' rule fails, suggesting accounting profits aren't real cash
no_growth_for_compoundercap → C
Revenue contracting over 5y, Smith's compounder thesis requires revenue actually compounding
leveraged_for_smithcap → C
Net debt over 3x EBITDA: Smith requires conservative balance sheets to survive multi-decade holds

See it in action

Every cap that fires on a real stock is surfaced inline on the verdict page with the specific reason. Run a verdict to see how the caps interact with the pillar score.

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Educational only. Not financial advice. See about for invest-like's editorial policy and our live track record.