Glossary
Investment Thesis
The written reason somebody owns what they own, in their own words, recorded at the time rather than reconstructed afterward.
A thesis is a short piece of writing that answers three things: what this company does that matters, what has to keep being true for that to hold, and what would count as evidence that it stopped being true. It is not a prediction of a price, and it does not have to be long.
The reason to write it down is that memory edits itself. Anyone checking back six months later remembers a version of their reasoning that has been quietly revised by whatever happened since, and everybody does this. Only the dated, written version can say what the reasoning actually was.
This is what the note beside each ticker on a ConvictionStocks watchlist is for, and why the field on the add form is labeled Investment Thesis. The value of having one appears on a bad week: a price falls, and the question becomes whether the cause was something already written down or something nobody had thought of. Those two feel identical at the time and are not the same situation at all.
Learn this properly
Lesson 14: What Are Conviction Stocks?A conviction stock is a company you understand well enough that a bad week doesn't change your mind about it. Here's what that research looks like, and where conviction stops and stubbornness starts.
Related terms
- Bull CaseThe written argument for why a company will do well, stated as specific claims about the business rather than about the price.
- Bear CaseThe written argument against a company, naming what would have to go wrong and what would show it was happening.
- WatchlistA saved list of companies somebody is following, which is where the research sits before, or instead of, anything being bought.
- PortfolioEverything you own across your accounts, considered as one collection rather than as separate holdings.
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