Foreword
This is a short paper about how Probative works.
We will not describe our internal tooling, our calibrations, our ranking formulas, the specific academic methods we build on, or the thresholds we apply at each stage of our process. That work is the actual moat behind the publication, and we keep it to ourselves — the way a chef keeps a recipe, the way a fund keeps its model.
What we will describe is what we believe, what we have committed to, and what you will see from us week to week. The receipts are public. The reasoning is paywalled to Members. The system is ours.
Part I — What we believe
Owning a share of stock means owning a small piece of a real business — its factories, its brand, its contracts, its cash, its debt. The stock's price on any given day is the public market's best guess at what that piece is worth. Sometimes the guess is reasonable. Sometimes it is wildly wrong.
Value investing is the discipline of identifying when the market's guess is meaningfully too low — buying then, and then owning the business while it compounds. We are not traders flipping a name for a quick re-rate: our holding period is measured in years, and we sell only when a rule we wrote down in advance tells us the reason we bought has broken — not because a number on a screen reached a target. It is a 90-year-old idea, written down by Benjamin Graham and practiced by Warren Buffett for sixty years at Berkshire Hathaway. The playbook is in every public library.
We work in one specific corner of that tradition: buy good businesses that are temporarily cheap. Do not buy bad businesses that are permanently cheap. A "good business" is one whose returns on the capital it invests are durably high, whose advantage is visible in its own results, and whose cash flow shows up year after year. "Temporarily cheap" is when the price reflects a problem the evidence shows is passing — a one-time charge, a macro fear, a stretch of weak quarters in a cyclical industry — rather than a problem the evidence shows is permanent.
The whole work is telling the temporary kind of cheap apart from the permanent kind. That is what we do. That is all we do.
Part II — The two commitments
These are the rules we hold ourselves to. They will not change.
1. Filings only. Every claim we make about a company comes from a specific paragraph in a specific government-filed document — the 10-K, the 10-Q, an 8-K, the proxy statement, the XBRL financial statements. We do not rely on press releases, earnings-call transcripts, analyst opinion, or any claim we cannot trace to a filing.
Why: corporate filings are written under penalty of perjury. Everything else is marketing.
2. Hold to a rule. What turns a verdict into a system rather than an opinion is that we decide each name against criteria we set down before we saw the company — and we follow them whether we like the answer or not. When the criteria say BUY, we open the position. When they say PASS, we pass — even on a name we like. When our exit criteria are met on a position we hold, we re-think — by the rule, not by feel.
Why: human judgment is good at reading filings and uneven at making consistent decisions. Holding ourselves to a written rule is what gives us a track record we can stand behind years later.
Part III — What we will never do
A negative list, because it matters.
We will not trade. Holding period is years, not days. We will not react to a single bad quarter. We will not react to a macro headline. The thesis is judged against the filings, on the filings' clock.
We will not use leverage. Every position is long, cash-funded, sized at conviction.
We will not present opinion as fact. What we cannot support from a company's own filings, we do not claim.
We will not edit the track record. Every position we hold lives on a public page from the day it opens, with realized return next to it — winners and losers alike. We do not delete the bad ones. We do not re-date the good ones. We do not move losses to private memos.
We will not bury a holding. Every position we take joins the public record — winners and losers alike, nothing quietly dropped. The founding cohort is named publicly; every new name we open is named for Members, while its return and its eventual exit are logged on the public record either way.
We will not promise outperformance. Past performance does not predict future results. The receipts are receipts; they are not a guarantee.
Part IV — What you will see
Probative is an equity-research service, not a tip-sheet — and it has exactly two faces. The public track record is the proof: the realized record of every position we hold, open to anyone, that lets you check us before you pay. The live ledger is the product: the real-time, named, sized book of what we hold right now, with the full memo behind each name and a same-day alert when a sell-rule is met. Everything below is one or the other. The surface is small on purpose.
The monthly letter (Members). One letter a month. One name analyzed in full — the thesis, the bear case, and the single development that would prove us wrong — or, when the calendar warrants, a check-in on a name we already hold: where it stands, what the latest filings changed, and whether the thesis still holds.
The public track record. Every position we hold, with realized return versus the Russell Mid-Cap (and S&P 500) benchmark, dated from entry. The founding cohort is named publicly; a new name's return is shown while the name itself stays with Members. No edits. No deletions.
The live ledger (Members). Every position we hold, the date it opened, the entry price, the current price, the return, the distance to fair value. Updated through the trading day.
The memos (Members). The full thesis on every name we hold — the case for owning it, the bear case, and the exit criteria we are watching.
Alerts (Members). When our exit criteria are met on a position, you find out the same day.
That is the service. There are no upsells, no Discord, no podcast guests, no consulting calls, no API. Founding members simply lock a lower rate for the same work everyone else receives. There is a letter, a track record, a ledger, and the memos behind them.
A note on where we come from
Our work stands squarely in the tradition of value investing as Benjamin Graham and David Dodd defined it and Warren Buffett practiced it for sixty years: buy a sound business for less than it is worth, and own it while it compounds. That tradition is public, taught in every business school, and sitting on the shelf of every library. Anyone serious about investing should study it at the source.
We are one disciplined application of that tradition — not the only one, and not the inevitable one. We share the lineage gladly. The way we operationalize it is ours, and it stays ours.
Coda
Probative exists because we believe the discipline of reading filings closely and deferring to a written rule is rarer in this business than it should be — and because the only honest way to demonstrate that a system is real is to put its receipts on a public page from day one.
That is the entire pitch.
Read the filings. Hold to the rule.
— The Probative