Economic evidence
Customers, contracts, unit economics, industry structure, replacement cost, and competitive behavior.
Decision workflow
Investment Research Process: From Question to Decision Record
Good research does not eliminate uncertainty. It makes assumptions, evidence, incentives, and decision rules explicit enough that the thesis can be tested and updated. This workflow is designed for clarity rather than prediction theater.
Evidence firstRange, not point estimateRisk before return
01
Frame the question
Define the decision before collecting information
State the asset, the investor’s objective, the expected holding period, and the decision being considered. “Is this company good?” is too broad. “Does the current price offer an adequate return under conservative cash-flow assumptions without relying on refinancing?” is testable.
Write an initial variant view: what appears misunderstood, mispriced, or structurally attractive? The view is provisional. Its purpose is to guide evidence gathering and make later changes visible.
02
Build the evidence file
Prioritize primary, decision-relevant information
Financial evidence
Cash flow, balance-sheet claims, working capital, capital spending, dilution, and financing terms.
Governance evidence
Incentives, ownership, related parties, disclosure quality, and the history of capital allocation.
Market evidence
Price, liquidity, positioning, peer valuation, financing conditions, and implied expectations.
Contrary evidence
The strongest credible argument against the thesis and the data that would support it.
Source quality
Separate direct records, independent analysis, management claims, and unverified narratives.
03
Model outcomes
Connect the operating story to valuation and loss
Valuation
Estimate a range using normalized cash flow, scenarios, balance-sheet claims, and realistic dilution. Reverse the market price to identify the expectations already embedded.
Risk
Describe permanent-loss mechanisms, liquidity, leverage, and thesis breakers. Stress the path, not just the terminal value, because financing and obligations can force an early exit.
04
Translate to action
Record the decision and its boundaries
Before entry
- Base, downside, and upside values.
- Required margin of safety.
- Initial and maximum position size.
While held
- Key operating and balance-sheet indicators.
- Evidence required to add, hold, trim, or exit.
- Dates and events that warrant review.
After exit
- What the thesis got right and wrong.
- Process errors versus unpredictable outcomes.
- Lessons that apply to future decisions.
05
Decision hygiene
Keep the record falsifiable
A research note should make it possible to distinguish new evidence from a rewritten story. Date assumptions, preserve prior versions, and explain why the position changed. The goal is not to prove that the original analyst was smart. It is to improve the next decision.
Use the library
Apply the process to strategy, risk, and asset structures
Start with the Journal’s ten long-form guides and follow the internal links into the relevant research pages.