Why this matters for beginners
Without a written thesis, emotions decide for you when the price moves. With one, you can check whether the original reasoning still holds.
Main explanation
A thesis is a written statement: why this business, why now, what must remain true for the thesis to hold, and what would invalidate it (the 'kill criteria').
Writing forces clarity. Re-reading prevents emotional decisions later when the stock is down 30% and headlines are loud.
If you cannot write three sentences that a friend could understand, you do not have a thesis yet. You have a hunch.
Example using a real company
ASML is a classic thesis case: monopoly position, structural demand, clear kill criteria around export controls or competing technology.
- →Thesis: 'I own ASML because EUV is a monopoly, AI/HBM is driving structural demand, and service revenue is a recurring anchor. I would sell if export restrictions collapse the order book or if a competitor ships viable EUV.'
- →Compare that to 'I bought it because it's been going up'. That's not a thesis.
Common beginner mistakes
- ✕Writing only the bull case and calling it a thesis.
- ✕No kill criteria, so any price drop feels like a crisis.
- ✕Never re-reading the thesis after buying.
Key terms
- Thesis
- Written reasoning for why you own a position and what would change your mind.
- Kill criteria
- Specific conditions that would make you sell.
- Conviction
- How strongly your analysis supports holding through volatility.
Key takeaways
- 01Always write the thesis first.
- 02Include kill-criteria.
- 03Review quarterly.
Check yourself
- 01A thesis should include conditions that would make you sell.
- 02'It's been going up' counts as a thesis.
- 03Re-reading a thesis helps reduce emotional decisions.
Try the concept on a real company
Analyze ASML, MSFT, NVDA, and AAPL. For each, draft 3 sentences: why now, what must remain true, what would change your mind.
Educational examples only. Not buy or sell recommendations.