Good Story & Good Chart — The Investment Philosophy That Saved Me a Lot of Trouble
August 2, 2023
13 min read
Flagship · arvy Investment Philosophy
Good Story & Good Chart — A Hybrid Approach That Saved Me a Lot of Trouble
How do you increase the odds of being right and making money in the stock market? In a perfect world, things are kept simple: Buy great businesses. Don't overpay. Hold them for a long time by keeping the trend work in your favour. That's «Good Story & Good Chart» — the hybrid investment approach that has shaped my journey. Our original manifesto for The Market by NZZ plus the extended investor's view on the five criteria of a «Good Story» and the four signals of a «Good Chart».
The entire philosophy in 30 seconds
- A hybrid approach — like a surgeon with a CT scan. A surgeon does not operate without looking at the CT. An investor should not make a financial decision without analysing the charts. Fundamental data («Good Story») + technical confirmation («Good Chart») is the arvy methodology.
- Five criteria for a «Good Story»: top-quality business model with a moat, sustainable organic growth, robust FCF generation (with FCF yield as the most important valuation metric), low debt levels, structural tailwinds. Mastercard and Visa — arvy's textbook examples — meet all five.
- Four signals of a «Good Chart»: relative strength, accumulation/distribution, linearity, new highs. The tape tells all — in the long run the market is the best-informed analyst. The story is only trusted once confirmed by price action.
The original manifesto — the opening
I am a passionate believer in equities. The world of investing has always captivated me. As the lead portfolio manager of a global equity strategy and co-founder of arvy, an investment boutique with a global equity focus, I have had the privilege of delving deep into this dynamic realm.
Over the past decade, my journey has been guided by the wisdom of esteemed mentors and an insatiable desire for financial literature. I have soaked up the knowledge of market wizards as a never-ending student. In addition to thousands of hours of market observation, these accumulated insights have shaped arvy's investment approach: «Good Story & Good Chart».
It has saved me a lot of trouble.
→ Read the full manifesto on The Market by NZZ
Chart 1: Good Story & Good Chart — the framework
Source: NZZ The Market
01Why a hybrid approach? The surgeon-CT-scan metaphor
Investing, like economics, is more art than science.
— Howard Marks, Co-Founder Oaktree Capital
Thierry's original opens with a concrete analogy that shapes the entire arvy methodology: investing is like being a surgeon. You study for years, acquire a seemingly endless knowledge, learn, relearn, unlearn, and find your own style. At some point, you are the man in the arena, and you must specialise.
And then comes the operational key sentence: like a surgeon would not perform surgery without looking at a CT scan, an investor should not make a financial decision without analysing the charts.
This isn't just a rhetorical figure — it's the concrete methodological justification of the hybrid approach. Fundamental analysis («Good Story») provides the medical foundational knowledge, the years of studying the business model, the numbers, the competitive position. Technical analysis («Good Chart») provides the imaging — the objective snapshot that confirms (or refutes) what fundamental analysis suspects.
The arvy Investment Philosophy
Good Story & Good Chart — both pillars must be met
📖 Good Story
The fundamental pillar — what to buy
A business that has already won — with a durable competitive advantage and persistent profitability.
- Top-quality business model with a moat
- Sustainable organic growth
- Robust FCF generation + FCF yield valuation
- Low debt levels
- Structural tailwinds
📈 Good Chart
The technical pillar — when to buy
Price behaviour confirms the story. In the long run, the market is the best-informed analyst.
- Relative strength vs. index and sector
- Accumulation / distribution
- Linearity of the uptrend
- New highs
The formula
Good Story (What?) + Good Chart (When?) = Disciplined Selection
The hybrid approach isn't compromise — it's complementarity. Fundamental analysis alone can be stuck in «dead money» for years because the market hasn't recognised the quality yet. Technical analysis alone can jump on hype moves without substance. Both together systematically reduce both risks — and that's the operational value-add of the hybrid methodology vs. pure single-school approaches.
02The five criteria of a «Good Story»
I want sharks in the moat.
— Warren Buffett, on moats around quality businesses
A «Good Story» has already won. This isn't a «Next Big Thing» approach — it's investing in companies with demonstrated operational strength that can structurally sustain their winning streak. The philosophy is simple: winners possess a remarkable ability to sustain their winning streak, often surpassing even the most optimistic expectations (deepened in the «Winners Keep Winning» companion).
Thierry identified five specific criteria when screening his investment universe. As a practical illustration serve Mastercard and Visa — two stocks that at the time of the original manifesto (August 2023) had been an integral part of the arvy portfolio since day one, and met all five criteria textbook-style.
1Top-quality business model
A durable competitive advantage — what Warren Buffett calls a moat — that structurally protects high gross, operating and FCF margins. Five types of moats: intangible assets (patents), network effects, switching costs, cost advantage, efficient scale.
Underpinned by management with integrity and skin in the game, disciplined capital allocation, high return on invested capital (ROIC) — and hiring the right people. Corporate culture is the cornerstone.
Mastercard & Visa validationDuopoly with 63% global market share (Mastercard 24%, Visa 39%), US even 87%. Multiple moats simultaneously: network effects, efficient scale, cost advantages. Gross margins >90%, operating margins >55%, FCF margins >45%, ROIC >40%. MSCI ESG: Visa A, Mastercard AA.
2Sustainable organic revenue and earnings growth
Share price follows earnings and sales growth over time. Focus on organic growth. Acquisitions can be acceptable if proportionate in size — no transformative mega-deals (cf. Large-M&A trap, «12 Sell Rules»).
Mastercard & Visa validationContinuous double-digit growth rates in sales and profits. Over decades. Organic. A fantastic operational achievement — and the mechanical driver of long-term stock outperformance.
3Robust FCF generation and attractive FCF valuation
Cash is king. It's the lifeline of a business. With strong free cash flow generation, disciplined CEOs can do five things: invest capital with a high return, make smart acquisitions, reduce debt burden, buy back shares, pay dividends. Dividends and buybacks should be minimised if capital can be reinvested at high returns (cf. «Perfect Company» companion).
On valuation: the FCF yield is in Thierry's view the most important valuation metric. Comparability comes from three references: the company's own historical FCF yield, the risk-free rate, and the company's peers. Quality outweighs valuation — but avoid overpaying for nice companies.
Mastercard & Visa validationFCF yields tend to track their own average 3-4%, with FCF margins >45% — they literally print cash. Mastercard tends to enjoy a higher valuation due to its lower market capitalisation base and higher growth prospects in emerging markets.
4Low debt levels
Simple but important. No businesses with a lot of debt. No businesses that rely on leverage to make money. Leverage amplifies good times — and destroys in bad ones.
Mastercard & Visa validationNet-debt/FCF: Mastercard 0.22, Visa 0.76. Piece of cake. Both are structurally independent of credit cycles and interest-rate changes.
5Structural tailwinds
Why invest in struggling companies and fight the trend when you can choose those with favourable tailwinds? Structural market trends that work over decades are the operational multiplier of a quality business.
Mastercard & Visa validationDigital payments overtook cash globally just a few years ago. The pandemic accelerated the shift. Emerging markets (Mastercard's advantage) offer additional growth runway. The structural tailwind persists for decades.
The falling-in-love-with-the-story trap
Meeting all five criteria is a necessary but not sufficient condition for the investment. Thierry's clear warning in the original: one can easily fall in love with a «Good Story» because it has a larger subjective component. A thesis often seems more convincing in one's own analysis than it is in market reality. That's exactly why the Good Story needs the objective counter-check of the chart. The next section shows how.
03The «Good Chart» — the objective counter-check of the market
Markets are never wrong. Opinions often are.
— Jesse Livermore, American investor (1877-1940)
Thierry's core rule is clear: he never trusts the story nor just the numbers unless confirmed by price action — the «Good Chart». In the long run, the market is the best-informed analyst. A chart pattern is a visualisation of a stock's sentiment and delivers information that gives the disciplined investor a measurable edge.
Technical analysis isn't market timing — it's a risk-management tool that often provides signals even before fundamentals reflect the change. Thierry's concrete focus on four technical signals:
Relative strength
Outperformance of the stock against its underlying index and sector. A position with quality fundamentals but relative weakness against the index for months is a warning signal — the market sees something fundamental analysis hasn't yet shown.
Accumulation / distribution
The ratio between buying and selling pressure over time, visible in volume and price behaviour at key levels. Quality accumulation (rising prices on high volume, closing near daily high) vs. distribution (falling prices on high volume, closing near daily low).
Linearity
Price paths that have steadily risen for five, ten or twenty years — without large, volatile ups and downs. A linear upward path reflects earnings stability and business visibility. Large fluctuations are often an expression of structural uncertainty.
New highs
Stocks in uptrends regularly reaching new all-time highs. This dynamic isn't overshoot — it's typically the market signal of quality businesses that combine fundamental strength with market consensus. The trend is your friend until the end when it bends.
The sector component: 50% of stock performance
A decisive data point from Thierry's original: studies show that well over 50% of a stock's performance can be attributed to its sector. So the first step to outperforming is to avoid underperforming sectors. arvy incorporates the strength of the main sector and sub-sectors of every company held — this isn't an optional add-on filter, it's structurally a main lever of selection quality.
The evidence: linear vs. volatile
Thierry's original contrasts two chart types. General Electric since 1996 shows large ups and downs — a classic pattern he avoids. Despite a 120+ year business history and repeated «recovery» narratives, the price behaviour is an expression of structural fragility. The counter-example: Mastercard and Visa since 2008 vs. S&P 500 — continuous relative strength, linear upward movement, regularly new highs. Trending companies continuously create value for their shareholders — that reflects earnings stability and operational visibility.
On operational implementation: to initiate, increase, decrease or exit a position, chart patterns are the first starting point. Orderly pullbacks to support. Strong breakouts above resistance. The stock price maturation cycle — from accumulation through uptrend to distribution. The tape tells all, and the investor's job is to learn how to listen properly.
04The three conclusions — WHAT, WHEN, essence
Thierry's original ends with three clear conclusions that summarise the hybrid methodology in one formula. These three sentences are the condensed manifesto:
01Conclusion
The «Good Story» shows me what I should buy
Five criteria: moat + organic growth + FCF generation + low debt + structural tailwind. That's the fundamental foundation — the business must have already won.
02Conclusion
The «Good Chart» shows me when I should buy
Four signals: relative strength + accumulation/distribution + linearity + new highs. Market sentiment confirms the story — or refutes it. Without this confirmation, no position.
03Essence
Good Story & Good Chart in one formula
Buy great businesses. Don't overpay. Hold them for a long time by keeping the trend work in your favour. Three sentences that describe the hybrid approach in its essence.
What these three conclusions show: the methodology is intellectually trivial and operationally demanding. Every single building block — moat identification, FCF-yield valuation discipline, chart interpretation, sector selection — requires its own training. Integrating both pillars into a coherent methodology is the decade-long project Thierry describes in the opening. But the direction is clear: identify market leaders with demonstrated track records, increase success probabilities through chart confirmation, stay aligned with the market.
The operational deepening of the five criteria you find in the derived companions: Winners Keep Winning (Criterion 1 — quality persistence), The Tortoise Problem (quality selection overall), Perfect Company (Criterion 3 — reinvestment mathematics), 12 Sell Rules (sell discipline of the Good-Chart logic).
05What this means for your portfolio — the operational translation
Translating the philosophy into your own portfolio practice requires a structured approach. A selection inventory of your positions through the Good-Story-&-Good-Chart lens takes 90-120 minutes at 25-30 positions. Four concrete steps:
1. Good-Story audit per position. Does each position meet all five criteria? Moat with at least one of the five moat types documentable? Organic growth over 5+ years consistent? FCF generation robust, FCF yield attractive vs. history and risk-free rate? Net-debt/FCF below 2.0? Structural tailwind documentable? Positions with fewer than four met criteria aren't «Good Stories» in the structural sense.
2. Good-Chart confirmation. For each position check the four signals. Relative strength vs. MSCI World and sector over the last 12 months. Volume patterns (accumulation or distribution?). Linearity of the uptrend over 5/10/20 years. New highs or below historical highs? Position without Good-Chart confirmation: hold, but don't add.
3. Sector-strength check. Which sectors hold the majority of your positions? Do these sectors perform relative to the broad market? 50% of stock performance comes from the sector — ignoring this is structurally expensive. Identify sectors in late stage or distribution and critically review positions within them.
4. Hybrid integration in every buy decision. Before every new purchase: written Good-Story justification (five criteria, which met) + Good-Chart confirmation (four signals, which positive). Both must be there. A strong story without chart confirmation is too early. Chart dynamics without story substance is hype. Only the integration of both is disciplined selection.
What disciplined investors do
They treat every buy decision like a surgeon treats operation preparation: fundamental diagnosis (Good Story) + imaging (Good Chart), both before intervention. They document in writing which of the five Good-Story criteria are met — not from the gut. They wait for market confirmation instead of falling in love with a story. They accept that «dead money» periods without chart confirmation are part of disciplined investing. They review quarterly the integrity of both pillars. This discipline isn't spectacular — it's the methodical work that delivers structurally superior results over 30 years of compound effect. «Good Story & Good Chart» saves trouble because it systematically eliminates wrong purchases and emotional decisions. Exactly that's the operational translation of the surgeon metaphor.
06Frequently asked questions
Is the «Good Chart» approach a form of market timing?
No, with important nuance. Market timing tries to predict short-term market movements — that fails statistically almost always. «Good Chart» on the other hand seeks medium-term confirmation in the technical strength of a specific quality stock — as objective filter, whether the market is already actively recognising the story. Thierry's position: technical analysis as a risk-management tool that provides signals even before fundamental changes show in quarterly numbers. That's methodologically substantially different from market timing.
Why FCF yield as the valuation metric and not P/E?
FCF (free cash flow) is the cash the company actually generates — not the accounting profit, which can be distorted by depreciation, tax optimisation, and one-off effects. FCF yield shows the cash return the business delivers on its enterprise value. In Thierry's words: the most important valuation metric. Comparison is done against the company's own history, against the risk-free rate, and against peers.
How long does it take to master this methodology?
Thierry's own answer in the original: about a decade. Ten years of mentor wisdom, financial literature, and thousands of hours of market observation have shaped the methodology. That's not a discouragement signal — it's an honest time-horizon statement. The methodology is learnable. But it's not internalisable within weeks or months. Patience with oneself is part of the same discipline demanded in holding positions.
Does the philosophy work in bear markets too?
Yes — and exactly then it shows its strength. The Good-Chart filter detects market weakness earlier than quarterly reports, because relative strength and distribution patterns become visible before operational weakness shows in fundamentals. Quality businesses with intact Good Story and Good Chart (relative strength despite falling market, intact linearity) are often the superior positions in bear markets — they lose less and recover faster (cf. recovery mathematics in the 12-Sell-Rules companion).
What does arvy concretely hold today?
arvy follows the Good-Story-&-Good-Chart methodology in stock selection, combined with disciplined FCF-yield valuation and long-term holding patience. Mastercard and Visa were at the time of the original manifesto (August 2023) textbook examples and had been an integral part of the portfolio since day one. The current position distribution, sector allocation, and transparently documented sales (e.g. arvy's complete software-sector reduction in Q1 2026) you find in the arvy Quarterly Report Q1 2026.
Further reading — the companions that derive from this manifesto
The Tortoise Problem
Quality selection as pillar
Winners Keep Winning
Direct follow-up on persistence
Perfect Company
FCF reinvestment mathematics
12 Sell Rules
Sell discipline of the Good-Chart logic
The Safety Margin
Valuation discipline deepened
arvy Quarterly Report Q1 2026
Philosophy in operational practice
The discipline that saves you a lot of trouble
Would you let a surgeon operate on you who doesn't look at the CT scan? No. Why would you then make financial decisions without chart analysis? The surgeon metaphor isn't rhetorical — it's the methodological justification of arvy's hybrid philosophy. Fundamental analysis provides the years of studying the business model. Technical analysis provides the imaging. Both together are the toolkit for disciplined investment decisions.
«Good Story & Good Chart» isn't magical market fortune-telling. It's the structured integration of two analytical traditions that have historically often been treated as opposites. Five criteria for fundamental substance: moat, organic growth, FCF generation with FCF-yield valuation, low debt, structural tailwinds. Four signals for technical confirmation: relative strength, accumulation/distribution, linearity, new highs. Plus sector strength as the overarching filter. Nine concrete tools, integrated into a coherent methodology.
What separates disciplined investors from average ones is not superior intellect or better market forecasting. It's the methodical acceptance that investing without the CT scan is irresponsible — toward oneself and hard-earned capital. The philosophy is simple. Its internalisation takes years. Anyone investing the time builds wealth over decades that's mathematically more likely than with speculative investing. Anyone falling in love with stories without chart confirmation, or jumping on chart signals without story substance, learns the lesson expensively. The choice is personal. The consequences are mathematical. It saved me a lot of trouble. It can save you a lot of trouble too.
Original manifesto written by Thierry Borgeat, Co-Founder of arvy, for The Market by NZZ — his first contribution of the NZZ series. The extended arvy companion piece reviewed by Patrick Rissi, CFA and Florian Jauch, CFA. The philosophy presented — five Good-Story criteria plus four Good-Chart signals — is the operational basis of arvy's investment strategy. Last updated: April 2026.
Disclaimer: This article is for general educational purposes and does not constitute personal investment advice. The philosophy described here is one of many possible investment methodologies — other disciplined approaches can also be successful. Mastercard and Visa are cited as textbook examples from the original (August 2023); current arvy positions you find in the quarterly report. arvy is a FINMA-supervised asset manager with a CISA licence (Art. 24). Imprint & Legal Notice.
