Seven measures, applied in order.
The same seven considerations are applied to every decision the firm makes. They are ordered, and the order matters.
Independent Thinking
Positions originate from our own work rather than from consensus.
Evidence Before Conviction
A view earns capital only after the evidence behind it has been tested.
Defined Risk
Every position carries a stated loss tolerance before it is entered.
Repeatable Process
Decisions follow a written process, so outcomes can be attributed and reviewed.
Capital Discipline
Capital is committed in measured increments and reduced when the reasoning weakens.
Continuous Review
Positions are reviewed on a fixed schedule rather than when attention allows.
Long-Term Adaptability
Methods are expected to change, and are built so they can be replaced.