thesis-tracker

name	thesis-tracker
category	strategy
description	Buy-side discipline system. For each holding, maintain a written investment thesis — core thesis in 5 sentences, falsifiable assumptions, red lines, valuation anchors — and re-check it each quarter against new earnings/events. Scores thesis health 1-10 from assumption breakage and red-line triggers, and recommends hold / add / trim / exit. Use it right after buying a stock (to write the thesis) and every earnings season (to check it). Bridges the research→buy→monitor gap that most investors skip.

Investment Thesis Tracker: Post-Buy Discipline

Track an investment thesis for a holding. First use on a company → build the thesis; later uses → quarterly check.

Supported input: company name (auto-decide build vs track); company build (force rebuild); company quarterly check (against latest earnings).

"Buying is only the beginning. The real work is continuous tracking through the holding period." — Li Lu

"When the facts change, I change my mind. What do you do, sir?" — Keynes

Design Philosophy

Most investors' process is: research → buy → pray. Without systematic post-buy tracking, they: refuse to sell when they should ("wait, it'll come back"); panic-sell when they shouldn't ("down 20%, was I wrong?"); forget why they bought ("why did I buy this again?").

Buffett and Li Lu write down sell conditions before buying, then check the thesis each quarter.

Step 1: Decide the Mode

Check whether a thesis file already exists (use read_file on reports/{company}-thesis.md): not found → Build (Mode A); found → Track (Mode B).

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Mode A: Build the Investment Thesis

A0: Data Collection

Use web_search to get the current price, valuation (PE/PB/dividend yield), and latest financials. If a research report exists, read_file it first. Use financial_rigor (command=verify_valuation) to verify valuation, financial_rigor (command=verify_market_cap) to sanity-check market cap.

A1: Core Thesis (must be writable in ≤200 words)

The thesis must answer 5 questions, one sentence each:

I bought {Company} at {price} because:
1. The essence of this business is ___, and I understand how it makes money.
2. Its moat is ___, and it's widening / stable.
3. Management is ___, trustworthy because ___.
4. The current price is a {discount}% to intrinsic value; the margin of safety comes from ___.
5. Even if I'm wrong, downside is contained because ___.

If you can't fill 5 sentences, the thesis itself is flawed — the buy decision isn't clear enough.

A2: Core Assumptions List

Break the thesis into verifiable assumptions (3-7 typically; too few = shallow thinking, too many = unfocused):

#	Core Assumption	How to verify	Frequency	Status
1	e.g. revenue growth stays >15%	Quarterly revenue growth	Quarterly	🟢 Holding
2	e.g. gross margin stable >60%	Quarterly gross margin	Quarterly	🟢 Holding

A3: Red Lines (triggering any one = must re-evaluate)

#	Red-line condition	Severity	Action on trigger
1	Management integrity problem (fraud, related-party)	Fatal	Exit immediately
2	Core business revenue down 2 consecutive quarters	Severe	Trim 50%, re-evaluate
3	Moat explicitly breached (competitor reaches parity)	Severe	Deep research, consider exit
4	Regulatory change fundamentally alters the business model	Severe	Re-value intrinsic value
5	Management large unplanned disposal	Warning	Investigate
6	Macro trend reversal for this name's end-market — e.g. demographic clock (population decline) for consumer/property/education names; consumption downgrade (居民边际消费下降); generational shift away from the category	Severe	Re-evaluate the long-term demand base; for consumer-dependent names, this is often a slow-moving but fatal headwind — assess whether the thesis still holds at a structurally lower growth path

The red line on macro trends (demographic clock / consumption / generational) is deliberately explicit: a value-investing thesis that picks a consumer name without weighing population decline and consumption-trend headwinds is incomplete. For non-consumer names (e.g. pure B2B industrial), this red line may be loose; for consumer/retail/education/property names, weight it heavily.

Duan Yongping: "There are only three reasons to sell: 1. you got the buy wrong; 2. the fundamentals changed; 3. you found something better."

A4: Valuation Anchors

Metric	At buy	Optimistic target	Neutral target	Pessimistic
Price
PE (TTM)
Market cap
Intrinsic value estimate
Margin of safety

A5: Save the Thesis

Use write_file to write reports/{company}-thesis.md, including: build date, buy price and position, core thesis (5 sentences), assumptions list, red lines, valuation anchors, tracking table (empty initially).

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Mode B: Tracking Check

B1: Read the Existing Thesis

Use read_file to load core thesis, assumptions, red lines, last check record.

B2: Gather Latest Data

Use web_search / get_stock_news / get_financial_statements: ① latest earnings (if new quarter/year); ② recent material events (management, regulation, competition); ③ current price and valuation; ④ insider transactions (major shareholder changes).

B3: Check Each Assumption

#	Core Assumption	Last status	Latest evidence	Current status	Change
1	Revenue growth >15%	🟢 Holding	Q4 revenue growth 12%	🟡 Weakening	⚠️

Status definitions:

• 🟢 Holding — latest data supports
• 🟡 Weakening — still acceptable, but trend is unfavorable
• 🔴 Impaired — data clearly does not support
• ⚫ Broken — assumption has been overturned

B4: Red-Line Check

Check each red line; any triggered → flag prominently in the report + clear action recommendation.

B5: Valuation Update

Use financial_rigor (command=verify_valuation) to recompute PE/PB/ROE; compare against buy-time and last check:

Metric	At buy	Last check	Current	Change
Price
PE (TTM)
Intrinsic value estimate
Margin of safety

B6: Output the Tracking Report

Structure: ① Thesis health score (out of 10); ② Assumption check table; ③ Red-line check table; ④ Key changes this period (≤500 words); ⑤ Valuation update; ⑥ Conclusion and action; ⑦ Focus for next check.

Health formula: 10 - (⚫broken × 3) - (🔴impaired × 2) - (🟡weakening × 1) - (red-lines triggered × 5), min 1, max 10.

Score	Meaning	Action
9-10	All assumptions hold, thesis stronger than at buy	Consider adding
7-8	Core assumptions hold, some weakening	Continue holding
5-6	1-2 assumptions impaired, core logic intact	Hold but raise alertness
3-4	Multiple assumptions impaired, foundation shaken	Consider trimming
1-2	Red line triggered or core assumption broken	Strongly consider exit

The conclusion must clearly answer: ① Is the thesis still intact? (intact / weakening / impaired / broken); ② What to do? (add / hold / trim / exit); ③ Next check timing (next earnings / a specific event).

B7: Update the Thesis File

Use write_file to append this check to the tracking table in reports/{company}-thesis.md:

Check date	Health	Key change	Action
2026-04-09	7/10	Revenue growth slowed to 12%, but margins improved	Hold

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Key Principles

• Write sell conditions before buying — decisions made calmly beat decisions made in panic.
• Assumptions must be verifiable — "a great company" is not a thesis; "ROE>25% and stable" is.
• Act when a red line triggers — "let's wait and see" is how big losses happen.
• Thesis breaking ≠ stock falling — a 30% price drop doesn't force a sell; a broken thesis does.
• Be honest about mistakes — if the thesis was wrong, admit it; don't defend it to save face.
• Weigh macro headwinds for consumer names — demographic decline and consumption downgrade are slow but can be fatal for consumer/property/education theses; bake them into red lines, not just quarterly checks.