A framework for separating assumptions from evidence in an investment thesis

Educational discussion, not personal finance advice.

A useful way to improve an investment thesis is to label each sentence as fact, assumption, or unknown.

- Facts should be tied to a filing, a clearly identified data series, or another checkable source.
- Assumptions should include a timeframe and a reason: for example, what would make revenue growth or margins change.
- Unknowns should stay visible instead of being quietly converted into optimistic estimates.

From there, I find it helpful to write:
1. The core thesis in one paragraph.
2. Two or three measurable indicators that would support it.
3. A bear case describing how the thesis could fail.
4. A valuation range based on explicit assumptions rather than a single precise target.
5. The evidence that would cause a review or change of view.

This process does not eliminate uncertainty or produce a recommendation. It makes the reasoning easier to audit and helps distinguish a durable business argument from a persuasive narrative.