109 terms · 6 Parts · defined where they are taught
Glossary
The terms the framework defines for itself, each grouped by the Part that teaches it. Open one for a short definition, a link to the Part that develops it, the exhibit that shows it where there is one, and the related terms worth reading next. Descriptions of what the dashboard does are as of September 2026.
Foundation Lineage & Macro The Backbone Tax Architecture Construction Scoring
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Foundation
Why the traditional playbook is failing.
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A payoff whose upside and downside differ in size or likelihood. The framework seeks the favorable kind, where the possible gain is much larger than the possible loss, and treats symmetric measures such as standard deviation as an incomplete account of risk.
Part 2 · Stanley Druckenmiller: Conviction & asymmetric positioning Exhibit S1 · Shape the Payoff
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Missing a thesis break because there is more information than attention to read it. The framework answers with tripwires, predefined thresholds that watch the critical signals for you, so a break gets noticed when it happens instead of when it becomes convenient; the response stays yours.
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A structure that pairs very safe holdings with a small, highly convex allocation and skips the fragile middle. It aims for payoff asymmetry rather than low volatility. In the dashboard, Barbell is also one of the three structure labels a position can carry (see Carry vectors).
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A payoff that curves upward: a favorable move earns more than an equal adverse move costs. The framework sizes and places positions to keep that shape, and Part 6 scores it.
Part 2 · The intellectual foundations, thesis-agnostic Exhibit S1 · Shape the Payoff
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A fall from a prior peak, measured as the percentage lost from the high. The framework treats a survivable drawdown as the toll convex positions charge, provided position size and reserves let you hold through it.
Part 5 · Ballast: the reserve that buys the drawdown Exhibit P5-01 · Three Jobs. One Cycle.
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Harm that grows faster than the shock causing it, so one large shock does more damage than several small ones of the same total size. The framework keeps it apart from volatility, and CIS scores it in the Risk and Fragility component.
Part 6 · CIS: scoring the position, not the portfolio Exhibit 04 · The Hedge Broke
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Holding a deteriorating position because the story still sounds right. Part 1 lists it among six failure modes that recur in conventional portfolio management, and the framework answers it with a scored reassessment: CIS re-scores the position at each weekly review, and the core assertions written at entry say what would break the thesis, so evidence decides whether it stays.
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Keeping choices open: the right, without the obligation, to act when conditions favor you, the way dry powder waits for a better entry. Inside CIS, optionality is also a 25-point sub-score of Convexity and Optionality, read from company size and sector.
Part 6 · CIS: scoring the position, not the portfolio Exhibit P6-01 · CIS Measures the Position, Not the Portfolio
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Rare, very large gains: the few outcomes that can account for most of a convex portfolio’s lifetime return. Because so much rides on them, the account they are realized in (Part 4) matters more for them than for an ordinary gain.
Part 4 · Reserving Roth for Torque Exhibit P4-02 · The Tax Wedge
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The chance of a loss so large that compounding stops for good, because nothing later can repair it. The framework treats ruin as a line it does not cross, never a risk to trade against return. Small odds add up when repeated: a 1 percent yearly chance of ruin, taken for 50 years, leaves about a 40 percent chance of being ruined.
Part 2 · Nassim Nicholas Taleb: Antifragility & ruin avoidance Exhibit P2-02 · Ruin Comes First
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The risk that the order of returns, not just their average, decides the outcome once money is flowing out or in. For someone withdrawing, early losses force sales at low prices and leave less capital for the recovery to work on; with no cash flows, the same returns in any order end at the same value.
Part 3 · Optimizing for multi-cycle survivability Exhibit 05 · Path Changes Everything
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Whether a position or portfolio can come through stress without a forced sale or a decision that ends the compounding. For a single position, CIS scores it in the Risk and Fragility component, where a higher score means less fragile.
Part 6 · CIS: scoring the position, not the portfolio Exhibit P6-01 · CIS Measures the Position, Not the Portfolio
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The framework’s objective: compounding that keeps going because the portfolio can survive being wrong about timing, size or outcome while keeping enough exposure to convex payoffs. Staying in the game comes first, since a large gain cannot rescue capital that was forced out before it arrived.
Part 1 · The traditional playbook was built for a regime that has ended Exhibit 06 · Survive the Path
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How widely and how often a price moves, usually measured as the standard deviation of returns. The framework keeps it apart from fragility: a position can swing hard and still hold up, and what matters is whether a move can force you out.
Part 1 · The traditional playbook was built for a regime that has ended Exhibit P3-03 · Volatility Is the Toll
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The tendency of large price moves to follow large moves, and calm to follow calm, so turbulence arrives in stretches rather than as one isolated shock. A risk plan sized for an average week can be undersized for the weeks that follow a shock.
Part 1 · The traditional playbook was built for a regime that has ended
Lineage & Macro
Regime, thesis, and the policy backdrop.
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The tendency of the relationship between asset classes to change with the regime. From roughly 2000 to 2021 stocks and bonds tended to move in opposite directions, so bonds cushioned equity losses; in 2021 and 2022 the correlation turned positive again, and in 2022 both fell together.
Part 5 · Liquidity and correlation: throttle the regime Exhibit 03 · Correlation Turns
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A condition in which government debt and the cost of financing it, rather than the inflation goal, start to dictate what monetary policy can do. Part 1 reads it in the interest bill: by 2025 federal interest was back at about 3.2 percent of GDP, level with its 1991 peak, on more than twice the debt.
Part 2 · Macro thesis thought leaders Exhibit 02 · The Bill Came Due
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The supply of money and credit in the system, read through M2 growth and central-bank balance sheets, with real rates as its price. Bitcoin and other long-duration assets have tended to move with it, more sensitively than traditional assets, most reliably over multi-month horizons and only weakly over short ones.
Part 2 · Macro thesis thought leaders Exhibit P2-06 · Liquidity Sets the Tide
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A falsifiable view of the structural forces likely to shape markets over the next 5 to 20 years, which sets the portfolio’s structure. It assigns probabilities across regime scenarios rather than making a point forecast.
Part 2 · Identification, evaluation, and governance Exhibit P2-07 · Narrative Is Not Thesis
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Reflexivity, in Soros’s sense, is the loop in which beliefs and prices change the fundamentals they are supposed to reflect. Policy reflexivity adds policymakers to the loop: they react to markets, markets react back, and the feedback can amplify instability in either direction.
Part 2 · George Soros: Reflexivity & regime feedback loops Exhibit P2-04 · Markets Feed Back
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The conditions, read through growth, inflation and policy, that decide how assets behave and how they move together, often for years at a stretch. The framework is built to adapt when the regime shifts instead of optimizing for an average of all regimes. The dashboard’s own regime label is narrower, set by the direction of rates, inflation and unemployment (as of September 2026).
Part 2 · Identification, evaluation, and governance Exhibit L1 · Capital Has Weather
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A structural force expected to run for years, backed by mathematical, physical or political necessity rather than opinion, that the macro thesis names and that capital has to flow toward. The framework allocates by force rather than by sector, and spreads each force across several economically distinct businesses.
Part 5 · Allocate by force, not by sector Exhibit P5-08 · One Regime Force. Multiple Economic Expressions.
The Backbone
Bitcoin as the convexity backbone.
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The handling rule for the Bitcoin backbone: buy it, typically through payroll DCA, and never sell, trade or rebalance it. Valuation models set the pace of buying and never call an entry or an exit. Cash needs are met from income and other assets; borrowing against the reserve, when used, funds income-producing assets, and a loan adds interest cost and the risk of a forced, taxable sale if the collateral falls far enough.
Part 3 · Accumulate, don’t trade Exhibit P3-02 · Accumulate, Don’t Trade
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The portfolio’s reserve asset and main source of convexity: a Bitcoin holding kept outside the three postures and the concentration limits, accumulated on a schedule at a pace set by valuation discipline, and never sold, traded or rebalanced. It is scored like every other holding, but the score does not size, gate or sell it; Part 3’s rules govern it.
Part 3 · Bitcoin as the convexity backbone Exhibit P3-03 · Volatility Is the Toll
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Keeping Bitcoin’s private keys offline, out of reach of internet-connected systems. The framework’s default holds the whole reserve this way, on hardware wallets under the holder’s own keys in a taxable account; coins pledged for a loan leave it for the lender’s custody or a shared multisig for the life of the loan.
Part 3 · TAM, custody, and the borrow phase Exhibit P3-06 · Cold Storage to Borrow
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Buying a fixed amount on a set schedule regardless of price, which spreads entry risk across time. The framework funds it from income, raises it about 50 percent when valuation models converge on a deep discount, and slows discretionary buying during extensions.
Part 3 · Accumulate, don’t trade Exhibit P3-02 · Accumulate, Don’t Trade
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Reading Bitcoin’s value from several independent models and changing the pace of buying only when they agree. When they agree and the price sits more than 30 percent below their combined estimate, the holder raises DCA about 50 percent or deploys dry powder; when they converge on overvaluation, discretionary buying slows; when they diverge widely, the schedule continues with no sharp changes. It is written guidance you apply, and the dashboard computes no convergence.
Part 3 · Why Bitcoin can be modeled Exhibit P3-05 · Models Must Converge
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A band around a power-law trend: on log-log axes (log price against log days since the genesis block), Bitcoin’s price has historically tracked a straight line, with spikes above it and capitulations below. The framework reads it as context for accumulation pace, not a price prediction. No line in it is a hard floor: Bitcoin spent most of February to mid-September 2026 below the dashboard’s floor line.
Part 3 · Why Bitcoin can be modeled Exhibit P3-04 · Power-Law Corridor
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Bitcoin’s average on-chain cost basis: the realized cap (every coin valued at the price it last moved) divided by supply. It tends to rise as coins change hands at higher prices but can fall in a deep bear market, as it did in 2022. It marks a historically important bear-market level, not a hard floor: price traded below it for months at a time in 2018 to 2019 and again in 2022 to 2023.
Part 3 · Why Bitcoin can be modeled Exhibit P3-05 · Models Must Converge
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Total addressable market: the size of the market an asset could eventually draw on. For a company it is the market it could serve, set against its current value, which CIS scores as headroom; for Bitcoin, Part 3 estimates the share of existing monetary assets it could absorb. It sizes potential; it does not forecast a price.
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A stretch when Bitcoin trades far above its power-law trend and its realized price: at the November 2021 high it sat about 3 times the dashboard’s trend line. The response is to slow discretionary buying and bank income as dry powder while the scheduled DCA continues; an extension never prompts a sale of the reserve.
Part 3 · Through two cycles Exhibit P3-04 · Power-Law Corridor
Tax Architecture
Wrappers, basis, and what you keep.
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A way to fund a Roth IRA when your income is above the limit for contributing directly: contribute to a traditional IRA without deducting it, then convert. It works under current law, and the pro-rata rule taxes part of the conversion if you hold other pre-tax IRA money at year-end.
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Deferring income into a pre-tax 401(k) or 403(b) in an unusually high-income year, then converting it to Roth or withdrawing it in a later year taxed at a lower rate. The value captured is the spread between the two marginal rates. A traditional IRA usually cannot carry it, because the deduction phases out in such a year for anyone covered by a workplace plan.
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Holding appreciated assets instead of selling them, borrowing against them for cash, and leaving them to heirs, who under current US law receive a stepped-up basis, so the gain built up during life may never be taxed as income; the loan is repaid from the estate. It works for any appreciated capital asset, depends on current law and on credit staying available, and carries interest cost and liquidation risk.
Part 3 · TAM, custody, and the borrow phase Exhibit P3-06 · Cold Storage to Borrow
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The profit from selling a holding for more than its cost basis; in a taxable account it is taxed in the year you sell. Under current federal law a gain held more than a year is taxed at 0, 15 or 20 percent, plus the 3.8 percent NIIT at higher incomes (23.8 percent at the top), while a gain held a year or less is taxed as ordinary income. That gap, and the account the holding sits in, decide how much of a gain you keep.
Part 4 · The work taxable accounts do Exhibit P4-02 · The Tax Wedge
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What a holding counts as having cost you for tax purposes, usually the price paid plus fees. Your gain or loss on a sale is measured from it, return-of-capital distributions lower it, and under current law heirs generally receive it stepped up to the value at death.
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Borrowing from your broker against the securities in your account instead of selling them. The framework treats it as an optional overlay, worth carrying only while the income it funds yields more than the borrow rate, and the broker can change its terms or call the loan under stress. A loan supplies cash without a sale, but it adds interest cost and the risk of a forced sale, which is a taxable event; Part 3’s loan-to-value arithmetic shows how fast falling collateral closes the gap to a forced sale.
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A 3.8 percent federal tax on net investment income, owed on the smaller of that income or the amount by which modified adjusted gross income exceeds $200,000 (single) or $250,000 (married filing jointly). The thresholds are not indexed for inflation. Qualified Roth withdrawals are not subject to it, part of why a taxable account keeps less of a large gain than a Roth.
Part 4 · Wrapper engineering as a structural edge Exhibit P4-02 · The Tax Wedge
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An account funded before tax: contributions lower your taxable income now, and withdrawals are taxed as ordinary income. At equal tax rates in and out, Roth and pre-tax end even. For convex, right-tail positions the balance tips toward Roth because contribution limits are set in dollars, required distributions can push large pre-tax balances into higher brackets, and heirs generally inherit a Roth free of income tax under current law (Part 4).
Part 4 · Pre-tax accounts: inferior, occasionally useful Exhibit P4-04 · Gross Is Not Net
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Buying convexity with options: a long call, a long put or a defined-risk spread, where the most you can lose is known at entry. It is the only options use the framework permits inside a Roth, a tactical overlay for a high-conviction thesis capped at 3 to 5 percent of the account measured as maximum loss at entry ($2,250 to $3,750 in a $75,000 Roth); naked options and short volatility are excluded.
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A withdrawal the law requires each year from pre-tax retirement accounts. RMDs start at age 73, or at 75 for anyone born in 1960 or later, under current rules. They create taxable income whether or not you need it, one reason the framework favors Roth, which requires none from its original owner, for long-horizon convex positions.
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A distribution treated as a return of your own invested capital rather than as income, a characterization set each tax year that can change. It is not taxed when received but lowers your cost basis, deferring the tax until you sell, unless a step-up at death resets the basis first under current law. Once basis reaches zero, further return-of-capital distributions are taxed as capital gains when received.
Part 4 · The work taxable accounts do Exhibit P4-03 · ROC Changes the Yield
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An account funded with after-tax money whose qualified withdrawals are tax-free, so gains compound and positions can be sold inside it without tax. The framework treats its annual capacity as scarce and spends it on Torque that may rotate. Bitcoin, which is never sold, sits outside it by default.
Part 4 · Reserving Roth for Torque Exhibit P4-02 · The Tax Wedge
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The reset of an inherited asset’s cost basis to its value at the owner’s death under current US law (IRC §1014), so the gain built up during the owner’s life is not taxed as income. Gifts made during life keep the giver’s basis, and pre-tax retirement accounts get no step-up: heirs owe income tax on what they withdraw. It is policy-dependent, and it is one reason the framework holds never-sold Bitcoin in a taxable account.
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The gap between a gross gain and what you keep after tax in a given account. In dollars it grows with the gain: a taxable account that sells a long-held winner typically pays 15 to 23.8 percent in federal tax, plus any state tax, while qualified Roth withdrawals pay none, so the largest wins are where account placement matters most (Part 4 works the arithmetic).
Part 4 · Reserving Roth for Torque Exhibit P4-02 · The Tax Wedge
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The type of account a holding sits in: Roth, taxable or pre-tax, each with its own tax rules. Over decades the wrapper can change what you keep by a wide margin, so the framework decides placement as deliberately as it picks positions; Parts 4 and 5 work the arithmetic.
Part 4 · Wrapper engineering as a structural edge Exhibit P4-02 · The Tax Wedge
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Selling a holding at a loss on purpose to offset realized gains, plus up to $3,000 of ordinary income a year ($1,500 if married filing separately), while keeping similar exposure through a holding that is not substantially identical. Net losses beyond that carry forward to later years. The replacement starts at a lower basis, so much of the benefit is a deferral.
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An ordinary brokerage account with no contribution limit, where gains are taxed when you sell and distributions in the year they are paid. The framework places return-of-capital Ballast, buy-and-hold positions beyond Roth capacity and harvesting satellites here, and holds never-sold Bitcoin here by default: held to death it passes with a stepped-up basis under current law, and only a taxable holding can be pledged for a loan.
Part 4 · The work taxable accounts do Exhibit P4-03 · ROC Changes the Yield
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What the portfolio leaves you at the end of the horizon, after taxes, fees and other frictions. The framework judges decisions by it rather than by any single year’s return.
Part 4 · Wrapper engineering as a structural edge Exhibit P4-02 · The Tax Wedge
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A rule that disallows a loss on stock or securities if you buy substantially identical ones within 30 days before or after the sale, in any of your accounts. The disallowed loss is normally added to the replacement’s basis, so it is deferred, but a repurchase inside an IRA or Roth IRA loses it for good. Directly held Bitcoin is not covered under current law; H.R. 10357, advanced by the House Ways and Means Committee on September 16, 2026, would extend the rule to digital assets sold after September 14, 2026 if enacted as approved, and it is not law.
Construction
Postures, sizing, and the rules of change.
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The highest price of the past 52 weeks. The framework reads a position’s distance below it as one of three momentum dimensions: within 10 percent is healthy, 25 percent or more below is a correction, and 40 percent or more is severe distress (a doctrine target the dashboard does not yet measure).
Part 5 · Momentum: conviction requires confirmation Exhibit P5-06 · Conviction Requires Market Confirmation
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An AI-assisted research step the practitioner runs after a tripwire fires to speed evidence-gathering, without handing final judgment to the machine.
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The size range a CIS score earns within its posture’s table. For Torque, 70 and above is core, 60 to 69 standard, 50 to 59 a starter, and below 50 nothing; Ballast uses the same cut points with smaller ranges (its 50 to 59 band is marginal), and Hype is simply eligible from 50 at 2 to 5 percent.
Part 5 · Torque: leverage on regime forces Exhibit P5-04 · The Same Score Does Not Create the Same Position
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The reserve posture: positions built to hold steady through liquidity stress, policy error or a narrative reversal, then supply the capital to buy the dislocation. Aggregate Ballast stays at or above 15 percent, and yield alone never qualifies a position (see Ballast eligibility).
Part 5 · Ballast: the reserve that buys the drawdown Exhibit P5-03 · Ballast Preserves the Right to Buy
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The checklist for Ballast: a candidate must pass at least three of five tests covering a fortress balance sheet, diversified revenue, durable cash generation, low factor correlation and a liquidity-resilient valuation. Yield is not one of the five: income may come with quality, but it never qualifies a position on its own.
Part 5 · Five tests, three required Exhibit P5-03 · Ballast Preserves the Right to Buy
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How widely a move is shared across related names, read in the framework’s momentum test as the share of them making new highs. Broad participation supports a thesis; narrowing leadership warns that a move is thinning even while the index holds (a doctrine target the dashboard does not yet measure).
Part 5 · Momentum: conviction requires confirmation Exhibit P5-06 · Conviction Requires Market Confirmation
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The structure label every position carries, one of three: Long Carry (pro-liquidity, duration-sensitive growth that works when financial conditions ease), Short Carry (hard assets, defense and inflation or geopolitical stress plays that work when carry breaks), or Barbell (small positions with fat-tail optionality and discontinuous upside). Separately, the CIS Macro component has a carry-direction sub-score; the label is not an input to it.
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The rule that changes to the rules are themselves governed: before a change is made, it is routed to exactly one of three levels. Doctrine cannot change without abandoning the framework, parameters can be tuned within documented ranges, and overrides are temporary, documented and time-bounded.
Part 5 · Doctrine, parameters, overrides Exhibit P5-10 · Know What You Are Changing
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A ceiling on how much of the household portfolio, summed across every account, a single position or a small group may hold. Fifteen percent is the default single-position cap and 18 percent the absolute maximum, reachable only with a documented override (Part 5 doctrine); the top three stay within 35 percent and the top five within 50, with Bitcoin excluded. The dashboard flags breaches on the book you hold and does not block trades.
Part 5 · Torque: leverage on regime forces Exhibit P5-04 · The Same Score Does Not Create the Same Position
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The strength of the evidence behind a position, which is a different thing from enthusiasm for it. The framework measures it with CIS and lets size follow the score, so a position earns a larger band only as its evidence improves. The dashboard labels the score bands as conviction tiers: core, standard, starter and avoid.
Part 5 · Rebalancing as conviction expression Exhibit P5-02 · Position Size Must Be Earned
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The one to three claims a position depends on, written down at entry in a form that can be checked, such as “datacenter capex has three or more years to run.” They are what thesis drift is measured against: when one breaks, the position is reassessed on the evidence, whatever the price is doing.
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A principle that defines the framework itself, the top of its three levels of change governance. Change one and you are no longer running the framework, a different act from tuning a parameter or logging an override. The pages also use the word more loosely for any written rule the framework sets for you to carry out, as distinct from what the dashboard computes.
Part 5 · Doctrine, parameters, overrides Exhibit P5-10 · Know What You Are Changing
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Cash held ready to deploy into dislocations. It comes from two places: income held back from discretionary Bitcoin buying during extensions (Part 3), and Ballast distributions that build up between deployments and are spent in stress (Part 5).
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The rule for exposure around a scheduled earnings report: from five trading days before it (T-5), a position may hold no more than 3 percent of the portfolio, because one report can move a stock 10 to 30 percent either way and conviction predicts none of it. The dashboard flags a position above the cap in the days before its report, but it counts calendar days, so the flag can arrive a trading day or two after T-5; start the trim from the earnings calendar. It trims nothing: the trim is yours, and so is the T-21 to T-6 initiation blackout for positions priced for perfection.
Part 5 · Earnings proximity: cap the binary event Exhibit P5-05 · Conviction Does Not Eliminate Binary Risk
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The portfolio boundary for every concentration rule: the total across all accounts, Roth, pre-tax, taxable and Bitcoin cold storage. A position held in several accounts counts as one exposure, so $30,000 of a stock in a Roth plus $20,000 in a taxable account is a 10 percent position in a $500,000 household, and the limits apply to that sum.
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Narrative-driven convexity with weak structural backing. Useful only under hard caps and an exit committed to before entry. The caps are 5 percent a position and 10 percent in aggregate, and the stop sits 15 to 25 percent below entry.
Part 5 · Hype: quarantined, capped, and pre-committed to exit Exhibit P5-04 · The Same Score Does Not Create the Same Position
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A trend-validation rule: the market must confirm a thesis before it carries full size, and when all three momentum dimensions turn negative the position exits even with a high CIS. The dashboard does not yet measure the three dimensions.
Part 5 · Momentum: conviction requires confirmation Exhibit P5-06 · Conviction Requires Market Confirmation
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A deliberate, documented and time-bounded departure from a default parameter, recorded with its reasons and the conditions under which it reverts. Drift that nobody wrote down does not count as an override; Part 5 calls it the signature of a framework being abandoned while its owner still believes in it.
Part 5 · Doctrine, parameters, overrides Exhibit P5-10 · Know What You Are Changing
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A threshold the framework lets you tune, the middle level of change governance: component weights, sizing bands, momentum thresholds, the level of the earnings cap and the concentration limits, each adjustable inside a documented range for a stated reason. Changing a parameter calibrates the framework; changing doctrine abandons it.
Part 5 · Doctrine, parameters, overrides Exhibit P5-10 · Know What You Are Changing
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A rule on the way in: a position 20 percent or more below its cost takes no new capital until a confirming signal arrives, such as a higher low, a reclaimed level or new evidence for the thesis. Scaling in then runs over weeks, never more than a quarter of the target in one week. Both the freeze and the weekly add cap are practitioner discipline; the dashboard records the trade and never blocks it.
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How much capital a single position may carry. In this framework size is earned: the posture sets the band table, the score selects the band within it, and concentration limits cap the result at the household level.
Part 5 · Torque: leverage on regime forces Exhibit P5-04 · The Same Score Does Not Create the Same Position
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The behavioral class every position except Bitcoin carries: Torque, Ballast or Hype. It sets the position’s sizing table and governance rules, and it classifies how a holding behaves, whatever kind of asset it is. Bitcoin sits outside all three, under Part 3’s rules.
Part 5 · Three behaviors, one portfolio Exhibit P5-01 · Three Jobs. One Cycle.
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The Hype exit schedule: sell a third of the position at a 50 percent gain, another third at 100 percent, and let the rest run with its stop raised to breakeven. It locks in gains on the way up without pretending to know the top; the sales are yours, since the dashboard places no orders.
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A written protocol, run like a state machine, for markets where rising correlation and draining liquidity make independent-looking positions trade as one. When the VIX holds above 25, credit spreads widen and Torque positions correlate above 0.7, you pause new Torque adds, hold posture limits strictly, consider cutting gross exposure 10 to 20 percent, and resume only after two weeks of normal readings. The dashboard flags the VIX, credit spreads and average correlation across all your holdings; the throttle itself is yours.
Part 5 · Liquidity and correlation: throttle the regime Exhibit P5-07 · When Correlation Rises, Diversification Shrinks
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Moving capital between postures as conditions change: trimming Torque after a run to rebuild Ballast, then deploying Ballast into Torque during dislocations. It is the framework’s primary way of buying low without raising outside cash.
Part 5 · Ballast: the reserve that buys the drawdown Exhibit P5-03 · Ballast Preserves the Right to Buy
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An account deliberately concentrated in one position, such as a Roth IRA holding a single stock. It is allowed only while the household’s exposure to that position stays inside the concentration limits: the designation is written down, its drift is monitored, and if the aggregate breaches a limit, the trim is yours.
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An exit price set before you buy. Every Hype position carries one, 15 to 25 percent below entry, and Part 5 forbids widening it or reclassifying the position to avoid honoring it. Placing and honoring the stop is yours: the dashboard places no orders, though it flags a Hype position 25 percent or more below cost.
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A break in the reasons for owning a position: one of its written core assertions has stopped being true. Part 5 calls it a truth problem, as distinct from a price problem, and handles it at once: whatever the price is doing, the position is downgraded or exited, and a later rally does not rehabilitate it.
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The posture for high-upside positions in regime forces that are real, durable and capital-backed, yet still early or underowned by institutions. Torque carries the upside and takes the drawdowns, which can reach 50 to 70 percent in liquidity stress, so each position has to earn its size through its score.
Part 5 · Torque: leverage on regime forces Exhibit P5-01 · Three Jobs. One Cycle.
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The three tests a position must pass, all at once, before it can be Torque: a structural tailwind from an identifiable regime force, a business that can survive a 12 to 24 month liquidity drought without the capital markets, and an addressable market much larger than its current value, often 5 times or more. Passing earns the position a place; its score still decides the size.
Part 5 · Torque: leverage on regime forces Exhibit P5-02 · Position Size Must Be Earned
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A predefined threshold that triggers a review before denial, emotion or information overload can take over. The dashboard detects and displays; the response is yours.
Part 5 · Governance through the cycle Exhibit L3 · Govern the Thesis
Scoring
Two scores, and the weekly workflow that reads them.
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The FIS reading of 70: at or above it the portfolio holds; below it repair begins, starting with the top penalty the attribution names. Run the Weekly Review with FIS below 70 and the dashboard recommends fixing that penalty; it never blocks a trade. CIS reads the same four bands, but there 70 is only the floor of the Strong band, a band boundary, not an action trigger.
Part 6 · Reading the number Exhibit P6-02 · FIS Starts at 100
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A structural label the dashboard attaches to each position: spot Bitcoin, ETF, levered ETF, or operating equity (the default). It does not choose how CIS scores a position, since asset class chooses the scoring route, and it puts no floor under any score. Its main effect in the software is in FIS, where the Bitcoin archetype is left out of the concentration measures.
Part 6 · Scoring routes: the lens fits the asset Exhibit P6-01 · CIS Measures the Position, Not the Portfolio
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The itemized account of which rule cost how many points, reported with every FIS. It names the fix next to the deduction, and the points come back once the score can see the fix. As of September 2026 the dashboard’s score does not yet read the thesis, distribution and override records you keep, so in the current build it bills every position as undocumented and unclassified.
Part 6 · Subtractive scoring: every lost point has an owner Exhibit P6-02 · FIS Starts at 100
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A sub-score inside Convexity and Optionality, worth up to 20 points, that prices identifiable, dated reasons for a re-rating. Each catalyst’s points multiply its impact tier, its probability, its independence, the confidence of its own evidence, and a time decay that halves its value a year out. A catalyst that repeats another is discounted by up to half, only the top four count, and catalysts spanning different impact tiers earn up to 3 more points.
Part 6 · CIS: scoring the position, not the portfolio Exhibit P6-01 · CIS Measures the Position, Not the Portfolio
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Convexity Integrity Score: a 0 to 100 score for one position at a time, built from four components (convexity and optionality, risk and fragility, macro alignment, and execution and sentiment). The dashboard computes it, and Part 6 defines it. CIS below 50 removes allocation eligibility for a position in any of the three postures; Bitcoin answers to Part 3.
Part 6 · CIS: scoring the position, not the portfolio Exhibit P6-01 · CIS Measures the Position, Not the Portfolio
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How far the evidence behind a score can be trusted, graded low, medium or high. Nobody types it in: the dashboard derives it from the quality of the evidence behind each component, and it sets how far a single update may move the score and, for the macro component, how much weight that component carries.
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Scoring on a smooth scale instead of in steps: CIS is carried as an unrounded float from its components to the stored score and is bucketed only for display, so a position scores 78.3, not 75 or 80. Some inputs are read off tier ladders first, momentum and turnover among them, and a sparse-data cap can limit the score, but nothing rounds it. Continuity preserves the small week-over-week movement that weekly tracking exists to see.
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The CIS component for upside: how much room a position has to grow and how many ways it can get there. Four capped sub-scores sum to 100: headroom (35), optionality (25), catalyst density (20) and scarcity (20). It carries 40 percent of CIS at the reference weights, the largest share, because asymmetric upside is the objective; a thesis profile moves it between 30 and 45 percent, and under Capital Preservation Risk and Fragility outweighs it.
Part 6 · CIS: scoring the position, not the portfolio Exhibit P6-01 · CIS Measures the Position, Not the Portfolio
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The failure CIS cannot see because it scores one position at a time: several high-scoring positions that move together under regime stress. The dashboard’s Correlation Spike tripwire flags an average pairwise correlation above 0.7 across your non-cash holdings, once each has at least 60 daily returns; the doctrine’s response, adding uncorrelated assets, is yours. No FIS bucket charges for it, and CIS never does.
Part 6 · How implementations decay unnoticed Exhibit P6-05 · Failure Rarely Arrives All at Once
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Money tied up in a position nobody can currently justify: one with no documented thesis, or one whose score is more than 90 days old. It is one of the five FIS penalty buckets, capped at 15 points; a missing thesis costs 5 base points and a stale score 2, each multiplied by the position’s share of the portfolio.
Part 6 · Subtractive scoring: every lost point has an owner Exhibit P6-02 · FIS Starts at 100
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The record each Weekly Review writes as it closes: the positions whose scores moved, how FIS changed, which recommendations were made or held back and why, or why nothing was needed. The dashboard keeps the last 52 reviews, a year at a weekly cadence. It is what makes the next pass a measurement rather than a memory.
Part 6 · The weekly workflow Exhibit P6-04 · The Weekly Evidence Loop
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A cap on how far a score may move in a single update, scaled by how good the underlying evidence is: 3 points at low confidence, 5 at medium, 6 for proxy-derived evidence and 8 at high. It makes re-ratings of up to 20 points arrive across successive updates; a larger move is treated as a model disagreement and passes through.
Part 6 · Delta clamping: how far a score may move Exhibit P6-04 · The Weekly Evidence Loop
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The CIS component that asks whether reality is starting to validate the thesis. On the equity route it reads execution quality from three-month price momentum with a volatility adjustment, and market acceptance from trading turnover (thirty-day dollar volume over market value), 50 points each. It is the lightest component under every thesis profile, 10 percent at the reference weights and 15 under Capital Preservation, because execution follows quality.
Part 6 · CIS: scoring the position, not the portfolio Exhibit P6-01 · CIS Measures the Position, Not the Portfolio
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Framework Integrity Score: a score out of 100 for the portfolio as a whole, measuring how closely its construction follows the framework’s rules. FIS starts the assembled portfolio at 100 and deducts capped, named penalties in five buckets: allocation (25), governance (15), dead capital (15), concentration (15) and complexity (10, hard cap). The caps sum to 80, so a valid FIS cannot fall below 20.
Part 6 · FIS: good positions can create bad portfolios Exhibit P6-02 · FIS Starts at 100
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How much larger a company’s addressable market is than the company itself: the first and largest sub-score inside Convexity and Optionality, worth up to 35 points. It is scored on a logarithmic curve capped at 30 times, so the early multiples count for far more than the late ones: 5 times scores about 18, 10 times about 24, and 30 times the full 35.
Part 6 · CIS: scoring the position, not the portfolio Exhibit P6-01 · CIS Measures the Position, Not the Portfolio
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The four events that call for attention before the weekly pass comes round: a position moving more than 5 percent in a single day, material news, an earnings announcement, or a CIS update from new research (a tripwire interrupts by definition). The dashboard detects only the single-day move, at 5 percent or more, and lists it on its Governance page; recognizing the other three is yours, and tripwires show on the dashboard’s tripwire pages.
Part 6 · Intra-week triggers Exhibit P6-04 · The Weekly Evidence Loop
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The CIS component for fit with the current regime, read against your Part 2 thesis: regime fit (40 points), carry direction (30) and policy and flow (30). It carries 25 percent of CIS at the reference weights (20 to 30 percent across thesis profiles), less when the macro evidence is thin. Your own sector preferences move it most; the dashboard’s reading of rates, inflation and unemployment shifts it by a few points at most.
Part 6 · CIS: scoring the position, not the portfolio Exhibit P6-01 · CIS Measures the Position, Not the Portfolio
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One of the five capped categories FIS deducts from, starting the assembled portfolio at 100: allocation (25 points), governance (15), dead capital (15), concentration (15) and complexity (10, hard cap). The caps sum to 80, so a valid FIS cannot fall below 20, and every point lost names the rule that cost it.
Part 6 · Subtractive scoring: every lost point has an owner Exhibit P6-02 · FIS Starts at 100
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The gap between the portfolio’s actual mix of Torque, Ballast and Hype and its target mix, which the market can open without a single trade. It is measured in percentage points against the targets your operating thesis implies and reported alongside the score, never billed as a penalty; the dashboard warns at 10 points and fails at 20.
Part 6 · How implementations decay unnoticed Exhibit P6-05 · Failure Rarely Arrives All at Once
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The ten-point signal on score movement. When a position’s CIS has moved 10 points or more since your last Weekly Review, the review flags it for resizing toward the size its new score earns. Pacing the resize over two to four weeks is yours; the signal never changes posture, which Part 5 governs, and never forces an exit on its own.
Part 6 · How CIS feeds decisions Exhibit P6-04 · The Weekly Evidence Loop
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The rule that a correct week can end in doing nothing. A CIS or FIS change under 5 points is monitored, a position whose size already sits inside the band its score earns is not resized, and when every governance check passes, the answer is hold. Part 6 counts a week in which everything was measured and nothing moved as the system working.
Part 6 · The Restraint Principle Exhibit P6-04 · The Weekly Evidence Loop
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The CIS component for survival under stress, which is a different thing from price volatility: balance sheet (30 points), business model (30), factor correlation (20) and tail risk (20), where a higher score means less fragile. It carries 25 percent of CIS at the reference weights (20 to 35 percent across thesis profiles).
Part 6 · CIS: scoring the position, not the portfolio Exhibit P6-01 · CIS Measures the Position, Not the Portfolio
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The four named ranges both scores are read in: 70 and above Strong, 60 up to 70 Moderate, 50 up to 60 Caution, below 50 Weak, so a 69.9 is Moderate. On FIS 70 is also the action line; on CIS it is a band boundary, not an action trigger. In the dashboard the same bands carry numeric labels (70+, 60 to 69, 50 to 59, ≤49) and conviction tiers (core, standard, starter, avoid); the Next Dollar Score’s strong, moderate and weak ladder cuts at different points, so read the two separately.
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A position whose underlying quality has slipped while its recorded score and its sizing stay put, because nobody recalculated: a thesis played out, a market compressed, catalysts exhausted. The dashboard’s diagnostics warn once a score is more than 60 days old and fail past 90, and the dead-capital bucket charges any score older than 90 days.
Part 6 · How implementations decay unnoticed Exhibit P6-05 · Failure Rarely Arrives All at Once
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Scoring by deduction: start at a perfect 100 and subtract a named penalty for each rule broken, so every lost point traces to a cause. FIS works this way, which turns its score into a repair list with the largest deduction at the top.
Part 6 · Subtractive scoring: every lost point has an owner Exhibit P6-02 · FIS Starts at 100
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Scaling a penalty by the offending position’s share of the portfolio, floored at 0.2 percent and capped at 12 percent: a 6-point charge on a 5 percent position costs 0.3 points. Only the governance and dead-capital buckets work this way; allocation, concentration and complexity charges are flat.
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The framework’s weekly operating pass, run Sunday evening or Monday before the open: update CIS, calculate FIS, run the governance checks, act or deliberately hold, and log the result. It closes every week whether or not anything moved, so the next pass has something to measure against. In the dashboard the Weekly Review runs these steps when you start it; nothing runs it on a schedule.
Part 6 · The weekly workflow Exhibit P6-04 · The Weekly Evidence Loop