01 — Framing
What we are doing.
We build and document a simulated portfolio of companies we believe are able to lead their industry over the next five to ten years. This page describes the method: the criteria, the score, the points where an analysis stops and the limits of the whole framework.
The content we publish is identical for every reader and takes no account of anyone's financial situation, objectives or risk tolerance. We do not publish entry prices, position sizes or answers about individual portfolios: the reason for these absences is explained in the Transparency and limits section.
The portfolio we document is a simulation: no real capital is invested in it. It exists to make our process verifiable over time, not to be replicated.
02 — The six pillars
What we measure, and with what weight.
Every company receives a score from 0 to 10 on six dimensions. These are the weights, they add up to one and they do not change from one analysis to the next. For every pillar we state what raises the score and what lowers it.
Moat / disruptive potential
Measures how defensible the competitive advantage is over five to ten years, and whether it tends to grow rather than erode.
Raises the score: network effects that strengthen with scale, real switching costs for the customer, proprietary data that grows with use.
Lowers the score: an advantage a well capitalised competitor can reproduce, dependence on a single channel or customer, replaceable technology.
Team
Measures the quality of those in charge: track record of capital allocation, incentives, ownership stake, honesty of communication with shareholders.
Raises the score: founders or managers with a meaningful stake, capital reinvested with documented returns, mistakes admitted openly.
Lowers the score: recurring dilution of shareholders, pay disconnected from results, promises repeatedly made and missed.
TAM / growth
Measures the size of the realistically addressable market and the credibility of the growth path inside that market.
Raises the score: a large and structurally expanding market, a current share that is still small, growth driven by the product.
Lowers the score: a market defined elastically to look bigger, growth bought with discounts, dependence on a favourable cycle.
Unit economics
Measures whether every unit sold creates value: margins, customer acquisition cost, conversion of profit into cash at the current scale.
Raises the score: high and stable gross margins, customers who return more than they cost to acquire, profit that turns into cash.
Lowers the score: growth that worsens margins, profitability propped up by stock based compensation, cash systematically below reported profit.
Financial durability
Measures the ability to get through a prolonged stress scenario without having to turn to the market at the worst possible moment.
Raises the score: positive net cash, positive operating cash flow, debt maturities that are distant and spread out.
Lowers the score: material short term debt, tight covenants, dependence on refinancing or capital raises.
Valuation
Measures how much of the future path is already priced into the market. It is the pillar with the smallest weight: a great business at full price is still a great business.
Raises the score: a price that discounts assumptions more cautious than ours.
Lowers the score: a price that already embeds the most favourable scenario, with no margin for disappointment.
03 — The Generational Score
One number, and its exact meaning.
The Generational Score is the weighted average of the six pillars, rescaled to 0-100: round( Σ (pillar score × weight) × 10 ). No manual adjustment: the number we publish is the one the formula produces.
An example with real numbers, the Duolingo analysis: 6.5 × 0.25 + 8.5 × 0.20 + 7.0 × 0.15 + 8.0 × 0.15 + 10.0 × 0.15 + 7.0 × 0.10 = 7.775 → 77.75 → 78.
| Band | Meaning |
|---|---|
| 80–100 | Full match with our criteria: no weak pillar, a solid thesis across all six dimensions. |
| 65–79 | Good match with at least one explicit reservation: the thesis holds, but one pillar remains the point of attention. |
| 50–64 | Partial match: the company passes the gates but does not rank among the top ten. |
| Below 50 | Does not match our criteria. |
| Partial | Analysis stopped at a gate: the score covers only the pillars assessed up to that point and is not comparable with the others. |
What the score is not: it is not a judgement on the share price, it does not point to a moment to buy or to sell, it is not comparable with third party ratings and it takes no account of the reader's situation. It measures one thing only: how closely the company matches our selection criteria.
04 — The blocking gates
Where an analysis can stop.
Some flaws are not offset by a good score elsewhere. Three steps of the analysis are blocking gates: the disruptive character of the business, the quality of the team and the strength of the balance sheet. If one fails, the analysis stops there: the score stays partial and the company does not enter the portfolio.
The analysis is published anyway, with the reason for the stop: the rejects are part of the journey too, and they are the easiest part to rewrite after the fact if it is not put in writing straight away.
- In portfolio
- The analysis passed every gate and the company is today one of the positions in the simulated portfolio.
- Eligible
- The analysis passed every gate with a full score, but the company is not among the current positions.
- Gate not passed
- The analysis stopped at a gate: we publish the partial score and the reason for the stop.
05 — How an analysis is born
Generated with AI, approved by us.
Every analysis goes through four steps, in the same order, without exceptions. No content reaches publication without a human signature.
Generation
An artificial intelligence system applies the methodology on this page to the company, using financial data from licensed sources and documentary research.
Data verification
Every number quoted is checked mechanically against the source data and receives an accuracy score. Below the threshold, the analysis does not reach review: it goes back or is discarded.
Human review
We read the analysis with the verification report alongside it and approve or reject it with a note. No analysis publishes itself.
Publication
Only after approval. The analysis goes out with authors, date and time of completion and a dated reference price.
The analyses are produced with the assistance of artificial intelligence systems following the methodology described on this page, and are reviewed and approved by Riccardo Priotto and Simone Gallio, who assume editorial responsibility for them.
06 — Updates
When we publish, when we revisit.
An analysis is a photograph with a date. Here we state how often we take new ones and what obliges us to revisit the existing ones.
New analyses
We publish analyses in groups, as they pass data verification and human review, normally several times a month. We do not follow the news calendar: we follow our process.
Revisiting analyses
We revisit an analysis after every quarterly results release from the company and at every extraordinary event that touches the thesis. Every analysis carries the date and time of its latest version: what you read is dated, never timeless.
The score log →
We commit to maintaining a public log of the scores assigned over the last twelve months, with their changes: every promotion, every downgrade, every analysis stopped at a gate will remain available to consult.
07 — The simulated portfolio
Ten positions, every change with its reasons.
The portfolio is where the method stops being theory: the best analyses become positions, with rules stated in advance and not afterwards.
There are three rules. A cap: never more than ten positions; every entry beyond the cap forces an exit, and this obliges us to compare every new idea with the weakest of the ones we hold. Balancing constraints: by sector and by market, because ten theses concentrated on the same risk are a single thesis dressed up as ten. Immutable reasons: every change comes with the reason written at the moment of the decision, which is never rewritten after the fact.
The portfolio is a simulation with no real capital. We wanted it that way because what we document is the selection process: the simulation makes it verifiable over time, with weights, dates and reasons kept on record, without turning these pages into an allocation suggestion.
08 — Transparency and limits
What we disclose, what we don't do.
A method is judged also by what it admits it does not know and does not want to do. This section exists for that.
Conflicts of interest
Every analysis discloses whether the authors personally hold the security discussed. We receive no payment from the companies we analyse nor from third parties with an interest in our conclusions.
Sources and data
Financial data comes from licensed sources; quotations are short and attributed; projections are always labelled as such. In the text, facts carry their source and their date; assessments are recognisable as our own opinions.
What we do not publish, and why
No entry prices, no position sizes, no answers about individual situations. These are deliberate choices: this is research work addressed to the public, and it has to stay that way, not become personalised advice.
Limits of the method
The score is a judgement of ours: it condenses six dimensions into one number and by construction loses some nuance. The gates reduce false positives, but they also exclude companies that will turn out to be excellent. We prefer this error to its opposite.