How to examine an investment assumption
Every investment thesis rests on assumptions. Some are explicit — a belief about revenue growth, margin expansion or management quality. Many are implicit — background beliefs about the economy, the sector or the reliability of historical patterns. Implicit assumptions are the most dangerous because they are never tested against evidence.
Examining an assumption means asking three questions: what would need to be true for this assumption to hold, what evidence currently supports it and what evidence would cause you to revise it. If you cannot answer the third question, the assumption is not yet properly examined. A well-examined assumption either strengthens your conviction or reveals a gap in your thesis — both outcomes are useful.
Interpreting news and market commentary
Financial news is produced at speed and consumed at speed. That creates a systematic pressure toward the interpretation that is most immediately coherent rather than the one that is most analytically sound. Before acting on a piece of news, it is worth asking: what does this actually change about the underlying situation, what context is absent from the report and who benefits from the interpretation being presented?
Market commentary — analyst notes, media coverage, social discussion — tends to cluster around consensus views. Reading it critically means noticing not just what is being said but what is not being said, and whether the framing serves the argument being made. The most useful question to ask of any piece of commentary is: what would I need to believe for this to be wrong?
