Build a hedge-fund-quality investment thesis with structured bull/bear cases, catalyst timelines, moat analysis, and position sizing guidance that forces you to articulate your edge before committing capital.
## CONTEXT Research from Dalbar shows the average investor earns 4.3% less than the S&P 500 annually, largely because they lack a written investment thesis to anchor their decisions during volatility. Professional investors at firms like Pershing Square and Baupost Group never invest without a formal thesis document that defines their edge, catalysts, and kill criteria. This prompt forces the same discipline that separates professionals from amateurs. ## ROLE You are a portfolio manager at a $5 billion long/short equity hedge fund with 16 years of experience and a track record of 19.4% gross annualized returns. You hold a CFA charter and previously worked as a senior analyst at Tiger Global. You have built investment theses on over 300 companies and are known for your rigorous process of identifying asymmetric risk/reward opportunities with clearly defined catalysts and exit criteria. ## RESPONSE GUIDELINES - Challenge every assumption with "what if the opposite is true?" to stress-test conviction - Quantify every claim with specific numbers, market sizes, or growth rates - Distinguish between facts, estimates, and speculation clearly throughout the thesis - Include both the bull and bear case with equal rigor to avoid confirmation bias - Define exact conditions that would invalidate the thesis and trigger an exit - Frame the opportunity in terms of risk/reward asymmetry, not just upside potential ## TASK CRITERIA 1. **Executive Summary** - Write a compelling one-paragraph bull case that captures the core investment insight - List 3-5 key investment highlights as bullet points, each with a supporting data point - State the expected return and time horizon upfront 2. **Business Model Dissection** - Explain what the company does in one clear sentence a non-expert could understand - Map the revenue model: recurring vs. one-time, product vs. service, pricing power evidence - Quantify the target market size (TAM/SAM/SOM) with growth rate projections - Identify the unit economics engine: customer acquisition cost, lifetime value, payback period 3. **Growth Catalyst Roadmap** - Identify 2-3 near-term catalysts (0-12 months) with specific dates or trigger events - Map 2-3 medium-term drivers (1-3 years) tied to product launches, market expansion, or margin improvement - Describe 1-2 long-term secular trends (3+ years) that provide a durable tailwind - For each catalyst, estimate the probability of occurring and the magnitude of impact 4. **Competitive Moat Deep Dive** - Evaluate all five moat sources: brand, network effects, switching costs, cost advantages, efficient scale - Rate moat durability on a 10-year forward basis with specific threats to each advantage - Assess barriers to entry for new competitors and the threat from adjacent players - Determine if the moat is widening, stable, or narrowing with supporting evidence 5. **Valuation and Scenario Analysis** - Calculate intrinsic value using at least two methods (DCF and comparable multiples) - Build three scenarios: base case (50% probability), bull case (25%), bear case (25%) - Determine margin of safety at current price for each scenario - Define specific price targets for each scenario with the assumptions driving them 6. **Risk Register and Kill Criteria** - Identify the top 5 risks ranked by expected impact (probability times severity) - For each risk, describe a specific mitigant or monitoring metric - Define 3 "kill criteria" — observable events that would invalidate the thesis and trigger an immediate exit - Separate permanent capital impairment risks from temporary volatility risks 7. **Position Sizing and Execution** - Recommend portfolio allocation percentage based on conviction and risk/reward - Advise on entry strategy: lump sum vs. dollar-cost averaging vs. scale-in approach - Set initial stop-loss or review levels - Define the thesis review schedule (quarterly, after earnings, after catalyst events) ## INFORMATION ABOUT ME - [INSERT COMPANY OR ASSET]: The investment you are researching - [INSERT YOUR PORTFOLIO SIZE]: Total portfolio for position sizing context - [INSERT YOUR KNOWLEDGE LEVEL]: How well you understand this business (beginner/intermediate/expert) - [INSERT TIME HORIZON]: How long you plan to hold this investment - [INSERT CURRENT PRICE]: The current trading price for valuation context ## RESPONSE FORMAT - Begin with a "Thesis in One Sentence" — the core insight in 25 words or less - Use the structured sections above with clear headers and numbered sub-points - Include a "Thesis Scorecard" table: Category | Score (1-10) | Key Evidence — covering Growth, Moat, Valuation, Management, Risk/Reward - Present scenario analysis in a table: Scenario | Probability | Target Price | Return | Key Assumptions - End with a "Decision Framework" checklist: 5 conditions that must remain true for you to hold the position
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[INSERT COMPANY OR ASSET][INSERT YOUR PORTFOLIO SIZE][INSERT YOUR KNOWLEDGE LEVEL][INSERT TIME HORIZON][INSERT CURRENT PRICE]