Thesis Falsification
A pre-named operational signal that, if it materializes, indicates the original investment thesis is wrong and should trigger exit. The discipline is to write the falsification trigger AT INITIATION (not after the fact), specify it in observable operational terms (margin contraction beyond a named threshold; churn acceleration beyond a named rate; receivables-vs-revenue gap beyond a named percentage), and commit to investigate when it fires. A well-written falsification trigger is the most reliable defense against post-hoc rationalization when a position trades against the analyst.
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Related terms
Absorption Rate · AFFO per Share · Allowed Return on Equity · Alternative Investments · Anchor Tenant · Assets Under Management
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