Investing concepts, explained
One page per idea, in plain language: what it measures, how to read it, and where it shows up in the terminal. The methodology documents state the conventions behind each number; these pages answer the question first.
Portfolio analytics
What a performance or risk report is actually telling you.
What is Brinson attribution?Brinson attribution splits a portfolio's gap to its benchmark into allocation, selection and interaction, sector by sector. Plain English, no formulas.
What is tracking error?Tracking error measures how tightly a portfolio hugs its benchmark, and the realized figure is not the forward-looking one. Both, in plain English.
What is the efficient frontier?The efficient frontier is the set of portfolios earning the most expected return for each level of risk — what it shows, and what it assumes.
What is max-Sharpe portfolio optimization?Max-Sharpe optimization finds the weights with the best return per unit of risk, and needs a return view you supply. What that means in practice.
What is walk-forward backtesting?Walk-forward backtesting refits a strategy on past data only, then measures the period that follows — so the result is genuinely out of sample.
Valuation
The assumptions inside a price, and the measures each industry is judged on.
What is a reverse DCF?A reverse DCF starts from the share price and solves for the growth it already assumes, so the assumption can be checked against the record.
What is ROIC fade?ROIC fade assumes high returns on capital drift toward the cost of capital as competition arrives — why a valuation has to take a position on it.
What is the Rule of 40?The Rule of 40 adds a software company's revenue growth to its free-cash-flow margin and asks whether the total clears forty. What it catches.
Why are banks valued on price-to-tangible-book?Why banks are valued on price to tangible book rather than earnings — what the ratio measures, why goodwill comes out, and what it is read beside.
What is FFO for REITs?Funds from operations adds property depreciation back and takes one-off sale gains out, because net income understates what a REIT actually earns.
The disclosure record
What the public filings say, what they withhold, and who collects them.
What is the STOCK Act?The STOCK Act requires members of Congress to disclose trades above $1,000 within 45 days, in brackets rather than exact amounts. What a PTR shows.
What does OGE Form 278e disclose?OGE Form 278e is the executive branch's annual financial disclosure — assets, income, liabilities and outside positions, reported in value brackets.