PART 6: CONVEXITY & FRAMEWORK INTEGRITY SCORING
Multi-Part Document Structure This framework is presented in six interconnected parts: • Part 1: Foundation & Philosophy • Part 2: The Lineage & Macro Thesis Identification • Part 3: Bitcoin — Convexity Backbone • Part 4: Tax Architecture & ROC Strategy • Part 5: Portfolio Construction & Position Management • Part 6: Convexity & Framework Integrity Scoring (this document)
Purpose — The Execution Kernel
Parts 1–5 defined what the framework believes and why: regime framing, intellectual lineage, macro thesis formation, tax architecture, and portfolio construction with governance protocols.
Part 6 is the execution kernel. It quantifies, monitors, and enforces the system defined earlier. This part introduces no new rules—it operationalizes existing ones through two scoring mechanisms and a weekly workflow.
Responsibility Boundaries: CIS (Convexity Integrity Score) quantifies position quality. FIS (Framework Integrity Score) validates portfolio assembly. Part 6 does not decide—it measures and flags.
CIS: Position-Level Convexity Scoring
The Convexity Integrity Score (CIS) is a 0–100 asset-level score answering one question:
"How attractive is this position, right now, as a convex opportunity under radical uncertainty?"
CIS Scope
CIS is strictly position-level and portfolio-context-free. The same position scores identically regardless of what else is held, which wrapper contains it, or how concentrated the portfolio has become. CIS does not evaluate diversification, correlation, concentration, or tax efficiency.
Any portfolio-aware logic belongs to FIS or governance—never CIS.
Convexity & Optionality (C) — 40% TAM headroom, optionality surface, catalyst density, scarcity. Dominates weighting because convexity is the framework's objective function. Risk & Fragility (R) — 25% Survivability under stress, not price volatility. Balance sheet, business model fragility, factor correlation, tail exposure. Higher score = lower fragility. Macro Alignment (M) — 25% Fit to current regime forces. Regime sensitivity, carry direction, policy alignment per Part 2 thesis. Execution & Sentiment (E) — 10% Momentum, relative strength, technical positioning. Lowest weight because execution follows quality. Component weights are Parameters per Part 5's Doctrine/Parameters/Overrides framework—tunable within reason (e.g., C 35–45%, R 20–30%) with documented rationale. The four-component structure is Doctrine.
What CIS Excludes
| Excluded from CIS | Belongs To |
|---|---|
| Portfolio diversification | FIS |
| Position sizing | Governance (Part 5) |
| Thematic overlap / crowding | FIS |
| Internal correlation | FIS |
| Tax efficiency / wrapper placement | Governance (Part 4) |
| Concentration limits | FIS |
Scoring Mechanics
Continuous scoring: All subscores are floats, not bucketed tiers. A position scores 78.3, not 75 or 80.
Delta clamping: Updates are confidence-weighted to prevent oscillation. Low confidence permits ±3 points, medium ±5, high ±8. Initial scoring or material thesis changes permit ±15–20 to establish baselines. Confidence levels are asserted by the practitioner, with system assistance, reinforcing CIS as decision-support rather than autonomous judgment.
Archetype awareness: Bitcoin evaluates against monetary TAM with maximum survivability. ETFs score exposure thesis with reduced optionality. Cash-like Ballast scores role utility, not convexity. Archetypes define the scoring lens for a position's intrinsic characteristics, not portfolio context or relative allocation.
FIS: Portfolio Construction Integrity
Good positions can create bad portfolios. FIS answers:
"How well is the portfolio assembled relative to framework rules?"
A collection of high-CIS positions concentrated in a single sector, held in wrong wrappers, with drifted posture allocation, is a poorly constructed portfolio regardless of individual quality. FIS catches these failures.
Subtractive scoring: FIS starts at 100 and deducts penalties for violations. Fix the penalty → recover the points. Value-weighted penalties: Financial-impact penalties scale with position size (0.2% floor, 12% cap). Larger positions generate proportionally larger penalties, but the cap prevents single positions from dominating FIS.
FIS Penalty Buckets
Each bucket references the Part where its governing rule originates:
| Bucket | Max Penalty | Rule Source |
|---|---|---|
| Allocation Drift | 25 pts | Part 5 posture targets |
| Tax Architecture | 20 pts | Part 4 wrapper rules |
| Governance Violations | 15 pts | Part 5 sizing/momentum rules |
| Dead Capital | 15 pts | Part 6 staleness protocol |
| Concentration | 15 pts | Part 5 concentration limits |
| Posture Drift | 10 pts | Part 5 Torque/Ballast/Hype bands |
| Complexity | 10 pts (hard cap) | Part 6 tidiness |
FIS does not restate rules—it measures compliance. See referenced Parts for rule definitions.
FIS Interpretation
| FIS Range | Status | Action |
|---|---|---|
| 90–100 | Excellent | Maintain |
| 80–89 | Good | Optimize when convenient |
| 70–79 | Acceptable | Review attribution, prioritize top penalty |
| 60–69 | Concerning | Active remediation, pause new positions |
| <60 | Critical | Comprehensive review per Part 5 tripwires |
CIS × FIS Interaction
CIS and FIS are intentionally independent. Neither compensates for the other. A 95 CIS position in the wrong wrapper still generates FIS penalties. A perfectly constructed portfolio of 65 CIS positions remains low-quality. Both scores must be healthy.
| CIS | FIS | Diagnosis | Action |
|---|---|---|---|
| High (>80) | High (>80) | Healthy | Maintain |
| High (>80) | Low (<70) | Construction issue | Fix wrappers/allocation—keep positions |
| Low (<70) | High (>80) | Quality issue | Upgrade positions—construction is fine |
| Low (<70) | Low (<70) | Comprehensive | Fix FIS first (compounds faster), then CIS |
How CIS Feeds Decisions
CIS determines position sizing within the bands established by Part 5. It does not determine those bands—Part 5 governance does. See Part 5 "Torque Position Sizing," "Ballast Position Sizing," and "Hype Position Sizing" tables for full CIS-to-allocation mappings by posture. The relationship: higher CIS → larger allocation within posture limits; CIS <70 → trim or exit depending on posture.
Promotion (CIS +10 pts): Position may upsize toward new target. Scale over 2–4 weeks.
Demotion (CIS −10 pts): Position should downsize. CIS <70 triggers exit evaluation regardless of posture.
Posture reclassification: CIS change alone does not change posture. Torque→Ballast requires thesis maturation. Hype→Torque requires structural reality confirmation. Part 5 governs posture transitions.
Weekly Workflow
The framework operates on a weekly cadence with event-triggered updates. Execute Sunday evening or Monday pre-market.
Weekly Execution Sequence
01
CIS Updates For each position: calculate C, R, M, E → apply archetype mods → raw CIS → delta clamp → log
02
FIS Calculation Calculate penalties by bucket → value-weight → generate attribution → FIS = 100 − Σ(penalties)
03
Governance Checks Earnings proximity (T-5, >3%) · Momentum gates (3 dimensions) · Tripwires · Posture drift
04
Action Determination Tripwire → immediate response · Earnings → trim to 3% · FIS <70 → fix top penalty · CIS drift >10 → resize · No triggers → hold
Intra-Week Triggers
Position moves >5% in single day · Material news · Earnings announcement · Tripwire condition met
Action Frequency Limits
| Action Type | Minimum Interval | Exception |
|---|---|---|
| CIS recalculation | 7 days per position | Material news event |
| Position addition | 3 days between adds | Earnings rebuild |
| Full exit | No limit | Tripwire triggered |
| Partial trim | 5 days between trims | Earnings proximity |
Discipline includes restraint. CIS change <5: monitor. FIS change <5: monitor. Position within band: no resize. All governance checks pass: hold.
Failure Modes
Common patterns that degrade implementation quality without obvious signals:
A position that scored 82 eighteen months ago may now score 68—thesis played out, TAM compressed, catalysts exhausted—but without recalculation, sizing remains unchanged. Diagnostic: Flag positions >90 days stale.
Market movements cause posture allocations to drift without trades. Torque appreciates from 55% to 70%; Ballast becomes underweight. Diagnostic: Alert when posture deviates >10% from target.
Positions land in wrong wrappers opportunistically. Individual misplacements seem minor, but systematic suboptimization costs 15–25% of terminal wealth over 20 years. Diagnostic: Review any position contributing >1 pt to tax architecture penalty.
CIS evaluates positions individually, but regime stress correlates them. Five AI infrastructure positions may each score 85, but move together during liquidity withdrawal. Diagnostic: Alert when average position correlation exceeds 0.7. Correlation alerts are diagnostic signals; any resulting penalty is applied through FIS per governance rules, not directly within CIS.
Strong past performance reinforces thesis conviction, but the thesis may already be realized. Diagnostic: Require CIS recalculation after >50% appreciation.
Without objective CIS recalculation, narrative momentum substitutes for current analysis.
Framework Completion
Parts 1–6 form a complete system. The framework governs behavior; practitioners must execute.
Weekly burden: CIS review for every position, FIS recalculation after portfolio changes, earnings calendar monitoring, momentum tracking, posture drift detection, tripwire evaluation, longitudinal tracking. Framework health is longitudinal, not episodic—decay becomes visible only through week-over-week tracking.
Implementation Options
Manual tracking: Spreadsheets with weekly routines. Feasible for small portfolios (<10 positions). Prone to drift as complexity increases.
Custom tooling: Self-built CIS/FIS calculations and alerts. Requires development capability and maintenance.
ACF Dashboard: Native implementation layer with delta clamping, FIS attribution, governance enforcement, and longitudinal diagnostics.
Choose the implementation that makes systematic execution sustainable over the relevant horizon.
End of Part 6: Convexity & Framework Integrity Scoring Part 6 operationalized the framework: CIS for position quality, FIS for construction integrity, weekly workflow, and failure diagnostics. The Adaptive Convexity Framework is now complete. What CIS does: Quantifies position quality (0–100), portfolio-context-free. What FIS does: Validates portfolio assembly via penalty deduction from 100. What to do weekly: CIS → FIS → Governance checks → Act on triggers or hold.
This framework does not constitute investment, tax, or legal advice. Consult qualified professionals for your specific situation.