An investment thesis is a researched theory about an investment’s predicted performance. It replaces instinct-driven gambling with critical thinking, defined goals, and reasons for holding or selling. section 4.1 section 4.6
Build and test a thesis through a repeatable research process:
- Begin with an industry or problem you understand, using experience as a partial defense against overconfidence. section 4.1.1
- Refine the initial idea iteratively; challenge assumptions, accept failed paths, and pivot when the reasoning does not hold. section 4.1.1
- Invite unbiased experts to peer-review the argument, then define goals and criteria for holding or selling. section 4.1
- Research candidate companies by testing future cash generation, competitive protection, and margin of safety. section 4.1.3
- Specify measurable signals of success; if suitable metrics are difficult to find, refine the thesis further. section 4.4.4
Autonomous driving and LiDAR
A growth thesis starts with expanding autonomous driving and predicts effects such as fewer privately owned cars, more robotaxis, and driverless logistics. It then focuses on whether LiDAR companies can benefit, while tracking robotaxi counts, media coverage, deals, and contracts. section 4.1.1 section 4.4.4
