Investment Analysis Framework

Five interconnected analytical pillars form the investment framework behind this site. Macro regime sets the context, valuation sets the floor, momentum flags the timing, earnings quality filters the picks, and risk sizing determines how much to commit. Click any node to see the current signal and key insights.

The Five Pillars — March 2026 Signals

Click any pillar to expand · Signals updated monthly

📊 Macro Regime
🟡 Late Cycle
Score: +1/4 · Yield curve +0.4%
  • Yield curve steepening (+0.42%) — cautiously positive after prolonged inversion
  • Unemployment stable at 4.1%; leading indicators (LEI) still declining
  • Fed on hold at 4.33% — late-cycle confirmed; no cuts priced until late 2026
→ Build the detector (Python + FRED) → 2025 economic analysis
↙                                   ↘
💰 Valuation
🔴 Cautious
CAPE ~33 · Fwd P/E ~21x
  • CAPE ~33 implies sub-5% annualised 10-year equity returns historically
  • Fwd P/E ~21x vs. 10-yr avg ~17x — premium demands sustained earnings growth
  • Quality screen favours fwd P/E <25 + FCF yield >3% in this environment
→ Stock valuation framework → AI vs. fundamental analysis
📈 Momentum
🟡 Mixed
SPY above 200d MA · small caps weak
  • SPY holding above 200-day MA — framework green-lights large-cap momentum scanning
  • Small/mid-cap momentum diverging negatively — stick to S&P 500 universe only
  • Composite 3/6/12-month score positive for mega-cap tech; mixed for equal-weight
→ Build the momentum scanner
↘                                   ↙
📋 Earnings Quality
🟡 Watch
HY spread widening · accruals rising
  • Accruals ratio creeping above +0.05 across S&P 500 median — Sloan anomaly warning
  • Cash conversion ratios below 0.9 in multiple sectors; earnings quality deteriorating
  • HY credit spreads at 3.8% and widening — confirms macro late-cycle read
→ Build the earnings quality tool
↓
⚖️ Risk & Sizing
🔴 Elevated
VIX elevated · Monte Carlo VaR increasing
  • Monte Carlo VaR (95%) on a balanced portfolio up ~3pp over the past quarter
  • VIX elevated — reduce position sizes; no new full-size entries per framework rules
  • RL allocation model: hold current weights; ±5% drift threshold not yet breached
→ Run a Monte Carlo stress-test → RL allocation framework

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