A position begins with a business and the industry it operates in, and is taken only where the research supports a view the current price does not.

Work begins with primary documents: filings, financial statements, and what a business reports about its own operations. The industry is read alongside the company, because a business is not held independently of the market it sells into or the capacity being built around it.

A view on a business becomes a position only at a price. Valuation establishes what the market currently expects of a company, and the position rests on the distance between that and what the research supports.

Interest rates, inflation, growth, and the conditions of the market a security trades in are assessed for what they do to a thesis. They are read as exposures a position carries, not forecast as events.

Size follows from the strength of the work and from the exposure already held. Concentration, sector and factor exposure, and the loss tolerance of a position are settled before it is opened rather than after it moves.

A position is reviewed on a schedule rather than when it moves. The question at review is whether the thesis still holds, which is a different question from whether the price has agreed with it yet. A thesis that has been falsified is closed at whatever the price happens to be; a price that has moved against a thesis still standing is not, on its own, a reason to close anything. Keeping the two questions apart is most of the work.

A method is defined as much by what it refuses. None of these is a preference, and none of them moves:

Short-Term Trading

The method does not act on short-term price movement. A position is taken on a thesis with a horizon, or it is not taken.

Unbounded Leverage

Leverage is bounded by a limit set before a position is opened, and is never raised to defend one.

Undefined Risk

No position is entered without a stated loss tolerance, fixed before the position exists.