// strategy template
Deep Value
Statistically cheap against cash flow, with a balance sheet that can wait.
// the lines that end the argument
One criterion is hard: fail it and the score is capped no matter how well everything else scores.
- Earnings yield ≥ 8.0%
What gets measured
| Criterion | Needs | Weight |
|---|---|---|
| Earnings yieldhardInverse of P/E; trailing earnings over price. | ≥ 8.0%partial credit to 6.0% | 19%Missing: the position fails without it. |
| EV/EBITDAEnterprise value to EBITDA. | ≤ 7.00partial credit to 8.50 | 14%Missing: the criterion is skipped and its weight is dropped. |
| FCF yieldTrailing free cash flow over market cap. | ≥ 8.0%partial credit to 6.0% | 14%Missing: the criterion is skipped and its weight is dropped. |
| P/BPrice to book value. | ≤ 1.00partial credit to 1.50 | 12%Missing: the criterion is skipped and its weight is dropped. |
| Net debt / EBITDATotal debt minus cash, over EBITDA (TTM). | ≤ 3.50partial credit to 4.00 | 9%Missing: the criterion is skipped and its weight is dropped. |
| Interest coverageEBIT over interest expense. | ≥ 3.00partial credit to 2.00 | 9%Missing: the criterion is skipped and its weight is dropped. |
Weight is each criterion's share of the whole rule-set, rounded for display. Every figure here comes from the same file the product scores with - the page cannot say one thing while the terminal does another.
What needs judgment
Catalyst for re-rating
14%Buyback, activist, asset sale, management change - something that closes the gap.
Downside protection in assets
9%Hard assets or net cash that hold value if the thesis takes years.
These are the criteria a formula cannot settle. The AI judges them against the guidance above and shows its reasoning next to the verdict; the arithmetic stays with the deterministic rules.
Rules about the portfolio, not the stock
- No single position above 8% of the portfolio.
- No sector above 35% of the portfolio.
These are checked against the book as a whole. A holding can clear every criterion above and still put the portfolio in breach by being too large.
Before you take it as given
This rule-set is a starting point. The moment a portfolio applies it, every threshold, weight and hard line is yours to move - and most people should move them, because the thresholds that make sense for a concentrated book are not the ones that make sense for a wide one.
It has not been backtested and Monsa does not claim it works. What Monsa does is narrower and checkable: hold these rules, and every night it will tell you which of your holdings still clear them and which quietly stopped.
Applying a template takes a minute. The part that is hard to do alone is still being held to it in eight months.