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# The Trade Idea Thesis
Quantitative Analysis: Macro, Sectors & Stock Data
Qualitative Analysis: The Story. Understanding the company business & commenting on it.
KPI’s: Understanding the metrics that drive Revenue & Earnings
Catalyst: Potential event that will drive alpha
Time Horizon: Shortest time frame that will capture the catalyst(s)
Price Target: Quant and Volatility analysis
Trade Structure: Stock, options , spread trade ? Risk management ?
## Quantitative Analysis
Numbers, Numbers and Numbers !
EPS0, EPS1, EPS2, PE1, PE2, EG1, EG2, PEG1, PEG2
To work out these numbers you would only need stock price, reported EPS and forward looking EPS.
## Qualitative Analysis
Why inferior/superior earnings and/or revenue growth ?
What are the drivers of growth ?
What advantages/disadvantages in relation to the sector ?
Will it continue ?
What are the future catalysts ?
Do you agree with the market ?
Will you have conviction medium/long term if in the short term it goes against you ?
Are you willing to buy/short more to back your idea ?
What are the risks ?
What changes the story, what changes your mind if you are wrong ?
Who is the management and is it any good ?
Who are the shareholders ?
What will affect earnings ?
What is the sector doing ?
What is the product ?
How do they fit in the supply chain ?
Who are the suppliers ?
Who are the customers ?
Who is the competition ?
What is the company share of the market ? Gaining / Losing ?
## KPI’s
Most sectors have different KPI’s, find them usually in presentations, earning calls or industry reports.
## Catalysts
Earnings, Buyback, splits, dividends, outlook
Acquisition, Restructuring and Deals
Legal & Regulatory issues
Analyst upgrade / downgrade
Credit upgrade / downgrade
Short squeeze
Conference & Events
Products launches
# BREAK EVEN , PROFIT , RISK
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