The 8-section investment memo
The 8-section memo: (1) snapshot, (2) business model, (3) situation, (4) my view, (5) items for further diligence, (6) risks and counter-thesis, (7) base / bull / bear scenarios, (8) target price and timing. Every serious investor writes some version of this — even if only in their own notebook.
Observation, thesis, or hope: telling them apart
| Pitch fragment | Verdict | Why |
|---|---|---|
| "It's cheap on EV/EBITDA." | Observation, not thesis | Names the symptom, not the cause or the cure |
| "Estimates are too low because the new CEO has a turnaround track record at Hartwood." | Thesis | Variant fundamental view + named catalyst (next earnings) |
| "It will work over the long term." | Hope | No falsifiable claim, no catalyst, no horizon |
Worked example: Halton's thesis is not the multiple gap
Worked example — Halton Industries (fictional regional logistics): trades at 6.2x LTM EBITDA vs peers at 9.8x. The thesis is not the multiple gap. It is: "New CEO Kerry Grimes broke a 5-year streak of missed earnings; my unit-level model shows 2026E EBITDA 12% above consensus, driving multiple expansion to peer level over 18 months. Catalyst: Q2 earnings, 45 days out. Bull $48 / Base $36 / Bear $22."
Spotting the strongest thesis statement
State your thesis in two sentences
Why one fact pattern recurs across the toolkit
A note on the recurring example: you will meet the Pelham Holdings numbers again across this toolkit — in ptk-4 (Risk / Reward and Sizing), in Practitioner Toolkit III's ptk-14 (Position-Sizing as Risk Management), and in the capstone memo cluster (memo-2). That reuse is deliberate. Carrying one fact pattern across modules lets each new tool go deeper without spending your attention re-learning the company: one fact pattern, deepening tools. When Pelham reappears, you are meant to recognize it.
Sit with the ideas.
An analyst tells a portfolio manager: "I'm long Halton Industries because it trades at 8x EBITDA while peers trade at 14x." What is the most accurate critique of this pitch?