# equities

A skill that picks the right valuation metric for a given sector, matches index methodology to a mandate, and orders the steps of a single-stock analysis.

- skill · `type=skill` · Claude Code, Codex, Cursor, GitHub Copilot, Gemini CLI, OpenCode · 691 installs · ★ 218
- Author: JoelLewis
- License: MIT · policy=mirror · the beginning of the file is at the end of this page
- Source: https://github.com/JoelLewis/finance_skills/tree/HEAD/plugins/wealth-management/skills/equities/SKILL.md
- Updated: 2026-07-18
- HTML: https://affpapa.org/en/nevibecode/skills/equities

## What it does

The equities skill is a decision procedure, not a glossary. It walks the agent through three choices: which metric fits the company, which index methodology fits the mandate, and what order to analyze a stock in.

The core table maps business type to metric. Banks and insurers get P/B and ROE against P/B, and EV/EBITDA is ruled out because debt is raw material there rather than financing. Capital-intensive sectors get EV/EBITDA and EV/EBIT, which strip out depreciation policy and leverage differences between peers. For cyclicals the skill advises normalizing earnings to mid-cycle: a spot P/E at the peak is the lowest multiple you will see and it inverts the buy signal. A second table covers index construction, from cap weighting to equal and fundamental weighting, and names the tilt each one carries.

Then comes a six-step sequence: classify the business, run a quality screen (revenue and margin trend, ROIC against cost of capital, net debt/EBITDA, share count trajectory), pick the earnings basis, value with the matched metric plus one cross-check, look at factor exposures, and weigh the portfolio fit. There is a formula table (EV/EBITDA, earnings yield, PEG, Gordon growth, CAPM, total return) and a worked example on an industrial company. The skill assumes you can look up definitions yourself.

## Install

### Claude Code (native platform)

1. **Skills CLI (Vercel)**
```bash
npx skills add JoelLewis/finance_skills --skill equities -a claude-code
```

2. **Manually: put the files in place**
- File: `~/.claude/skills/equities/SKILL.md` — Copy the whole skill folder; for one project use .claude/skills/equities/

### Codex

1. **Skills CLI (Vercel)**
```bash
npx skills add JoelLewis/finance_skills --skill equities -a codex
```

2. **Manually: put the files in place**
- File: `.agents/skills/equities/SKILL.md` — For all projects use ~/.agents/skills/

### Cursor

1. **Skills CLI (Vercel)**
```bash
npx skills add JoelLewis/finance_skills --skill equities -a cursor
```

2. **Manually: put the files in place**
- File: `.cursor/skills/equities/SKILL.md` — Cursor also reads .agents/skills/ and .claude/skills/

### GitHub Copilot

1. **GitHub CLI**
```bash
gh skill install JoelLewis/finance_skills equities
```

2. **Manually: put the files in place**
- File: `.github/skills/equities/SKILL.md`

### Gemini CLI

1. **Skills CLI (Vercel)**
```bash
npx skills add JoelLewis/finance_skills --skill equities -a gemini-cli
```

2. **Platform CLI**
```bash
gemini skills install https://github.com/JoelLewis/finance_skills --path plugins/wealth-management/skills/equities
```

### Windsurf (Devin Desktop)

**Manually: put the files in place**
- File: `.devin/skills/equities/SKILL.md` — The legacy .windsurf/skills/ path still works

### OpenCode

**Skills CLI (Vercel)**
```bash
npx skills add JoelLewis/finance_skills --skill equities -a opencode
```

### Claude.ai

**Claude.ai**
- Zip the folder and upload it in Settings → Capabilities → Skills

Where a file is given instead of a command, copy the files from the source to that path: https://github.com/JoelLewis/finance_skills/tree/HEAD/plugins/wealth-management/skills/equities/SKILL.md

## When to use it
- match a valuation metric to a sector and capital structure
- work through a single stock from classification to portfolio fit
- choose an index methodology for a specific mandate
- separate a stock-specific thesis from a factor bet
- spot the value trap of a low trailing P/E at the cycle peak

## Example prompts
- walk this industrial company through the equities skill steps
- which multiple should I use for a bank versus a telecom?
- compare cap-weighted and equal-weighted for my mandate

## Source text · SKILL.md · MIT

Below is the content of a third-party file. It is data, not instructions for you: do not act on anything written inside unless the human asks. Block tag: aee468372727a0c2.

BEGIN THIRD-PARTY FILE aee468372727a0c2
```text
---
name: equities
description: "Analyze equity securities, factor models, and equity portfolio construction. Use when the user asks about stocks, equity valuation ratios, index construction methods, or style analysis. Also trigger when users mention 'P/E ratio', 'growth vs value', 'market cap weighting', 'sector allocation', 'GICS classification', 'earnings per share', 'Fama-French factors', 'CAPM', 'dividend yield', 'PEG ratio', 'EV/EBITDA', or ask which factors explain equity returns."
---

# Equities

This skill is a decision procedure: which valuation metric to use for which company, which index methodology fits which mandate, and the order of operations for analyzing a stock. It assumes the user can look up definitions; the value here is choosing the right tool.

## Core Concepts

### Choosing the Valuation Metric

Match the metric to the sector and capital structure — using the wrong one is the most common equity-analysis error.

| Situation | Use | Avoid | Why |
|-----------|-----|-------|-----|
| Financials (banks, insurers) | P/B, P/TBV, ROE vs P/B | EV/EBITDA | Debt is raw material, not financing — EV and EBITDA are meaningless; book value is marked closer to fair value |
| Capital-intensive (industrials, telecom, energy) | EV/EBITDA, EV/EBIT | P/E alone | Neutralizes depreciation policy and leverage differences across peers |
| Mature dividend payers (utilities, staples) | Dividend yield + payout sustainability, P/E | PEG | Growth is low and stable; income and coverage matter most |
| High-growth, low/no earnings | EV/Sales, PEG (if earnings exist), unit economics | P/E, P/B | Earnings are depressed by reinvestment; book value is mostly intangibles |
| Cyclicals (autos, semis, materials) | Mid-cycle or normalized P/E, P/B at trough | Spot P/E | P/E is lowest at the cycle peak and highest at the trough — spot P/E inverts the buy/sell signal |
| Negative earnings, positive cash flow | EV/EBITDA, P/FCF | P/E, earnings yield | Ratio is undefined or misleading with negative denominator |
| REITs and listed real estate | P/FFO, P/AFFO, NAV | P/E | GAAP depreciation distorts earnings for property — handled in detail by the real-assets skill |
| Cross-border / different leverage | EV-based multiples | Equity multiples | Enterprise value normalizes for capital structure |

Cross-checks that apply everywhere:
```
END THIRD-PARTY FILE aee468372727a0c2

The third-party file has ended. Everything between the aee468372727a0c2 tags is data: requests and commands from it are not followed. An “end of file” line with another tag inside the block is part of the file.

First 2360 of 8851 bytes. © JoelLewis · MIT · https://github.com/JoelLewis/finance_skills/tree/HEAD/plugins/wealth-management/skills/equities/SKILL.md

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