A source is not decoration for a conclusion
Separate provenance from truth. A company’s primary report confirms that the company disclosed a number, but does not make every explanation of its causes an independent conclusion. A research paper supports the result of a defined study, not the universality of every interpretation. An educational regulatory bulletin explains a concept but does not necessarily replace current operative text. Each document type has a boundary of use.
The minimum evidence card
Notez author or publisher, title, address, publication date, access date, version number and the specific section. Add the supported claim and its limit, for example “definition of the measure for the group in this report; not a comparable series for all companies.” For a file, preserve a copy and checksum where rights and internal policy permit. That fixes the version used but does not prove the content is true.
Keep a separate field for information availability over time. Reporting-period end, signing date, publication date and later correction date may differ. A historical test cannot use a later restatement as if it were known before the trade. A current description should not cite an old version without checking whether a newer version materially changes the conclusion.
Why two correct numbers may not be comparable
Supposons a fictional group presentation shows revenue of 120 while the report for the same year shows 100. Before accusing a source of error, check scope. In the author’s example, the presentation includes a sold division with revenue of 20, while the report shows continuing operations. Once definitions are disclosed, `120 − 20 = 100` explains the difference. This is a stipulated educational case, not an excuse for every mismatch.
Other causes must be checked in documents, not listed as convenient excuses: currency, rounding, gross versus net presentation, calendar versus financial year, segment versus group, and actual versus forecast data. If the bridge is not found, write “difference unexplained” and do not choose the number that best fits the desired conclusion.
Find the document behind the retelling
Investor.gov’s bulletin on reading US 10-K and 10-Q forms distinguishes financial statements, management discussion and risk factors. That distinction is useful as a search method: behind an attractive excerpt, find the relevant section of the full document. US forms and requirements are not Russian law; the method of reading is used here, not the legal regime.
If the original link is unavailable, state how and when a copy can be recovered. An archived page does not become current merely because it opened today. A search snippet supports only what is visible in it; several lines cannot justify claiming that an entire table was checked. Without the full material, narrow the claim or find an independent primary document.
Independent links are not always informationally independent
Three articles repeating one press release are not three confirmations of the underlying fact. Build a provenance chain: who obtained the data, who processed it and who merely repeated the conclusion. For a disputed number, seek a genuinely different channel: a primary table, separate disclosure or reproducible calculation. A commentator’s opinion can be a useful question, but it does not replace verification.
Scientific data require special attention to sample scope. A historical return study covering certain developed countries cannot be labelled “all global assets always.” Read the paper’s title and exact boundaries together.[2](#source-rm-history-returns) This protects against both overly optimistic and overly pessimistic retellings.
When is verification finished?
Vérifiez that the claim is no broader than the evidence, arithmetic is reproducible, the version is saved, limits are marked and context was not cut away. Ne claim a professional audit when only editorial source reading was done. An explicit limitation is better than invented confidence. For corporate presentations, continue with the investor-relations and disclosures guide; for historical claims, use the investment-history-evidence guide.
Before completion, give the evidence card to someone who did not perform the calculation. Is there enough information to find the same line and obtain the same result? If not, add page, units or the conversion rule. This reproducibility test is not a professional audit; it exposes context that a person familiar with the document may stop noticing.
Sources and limits of review
[1] Investor.gov, “How to Read a 10-K/10-Q,” a 2021 bulletin about US disclosures; not Russian law. [2] NBER, “The Rate of Return on Everything, 1870–2015,” covering asset classes in 16 developed economies and the limits of the historical comparison.
Competence boundaries as a map of falsifiable assumptions
In Berkshire Hathaway’s 1996 letter, the boundary of competence matters more than the number of familiar companies. This is a historical statement by the investor, not proof that a familiar brand is safe.[1](#source-cvclose-bh1996) Translate the principle into a research process: explain the path from customer to cash, including who pays, for what utility, what substitutes exist, which costs are unavoidable and what capital is needed before payment. Knowing one store as a customer proves only one customer experience, not the quality of the whole network.
Build a five-line map. For each assumption, record a primary observation, an alternative explanation, an acceptable discrepancy range and the action if it is breached. “Customers return because of quality” can be tested with comparable-cohort retention and discounts; an alternative is an expensive promotion. “Growth funds itself” is tested with inventory and receivables calendars, not profit alone. “Prices can rise” is tested with volume, churn and substitutes. “Costs are stable” requires separating contracted price from future purchasing. “Debt is serviced” is checked by payments and available cash, not brand value.
In an original example, a service sells 1,000 jobs at 200 units each, variable cost is 120 per job and fixed annual cost is 50,000. Operating residual is 30,000. At 20% lower volume it becomes 14,000: revenue falls 20% while residual falls 53.33%. This is not free cash flow; investment, taxes and working capital are excluded. Predictability must be tested across a range, not assumed from a familiar name.
Refusal, independent expertise and expanding the boundary
Set a refusal condition before assessing price. If rights to key technology are unknown, debt cannot be reconstructed or the source of cash receipts cannot be explained, “insufficient data” is a useful result. A low price does not remove uncertainty about the object being bought. For a complex instrument, add a map of payments, early termination terms and losses; a convenient interface does not expand contract knowledge.
Independent expertise is needed when the conclusion depends on specialized facts: engineering life, rights to developments or a complex obligation. Give the expert a narrow question and ask for fees and seller relationships. Ne ask only whether the company is good. A second analyst should attempt to falsify the model from primary documents, not find another positive retelling. Expertise reduces a particular gap; it does not assume all investment risk.
An initial impression can be a search hypothesis, not an exemption from evidence. If time or data prevent a complete review, set minimum acceptance conditions and refuse when they are unverified. Preserve the initial judgment until the outcome and practise with paper scenarios and feedback: hindsight can make an answer seem obvious. Expanding competence is a cycle of study, prediction, observation and error review. Ownership horizon must match cash needs and hypothesis-testing time; waiting longer does not repair a wrong model. Finally compare price with a value range: a well-understood business can still be overpriced, and a former success does not prove competence in a new technology.
A security is a right to a business: responsibility for the decision
Analyze not only the product brand but the specific claim: share class, residual cash flows, earlier obligations and how the stake may change after a new issue. Reconstruct sales, costs, investment and the negative scenario. Familiarity with a service helps formulate questions but does not establish the price of its rights. If the data cannot explain the mechanism, responsibility does not pass to the narrator or an independent expert.
Verifying accounts and choosing concentration are different decisions. A well-studied company can lose a key customer, and several familiar firms can depend on one factor. Set an acceptable dependence on one outcome and a common-loss scenario separately. Patience is not evidence of safety: permanent capital loss, a need to sell before testing the hypothesis and a missed alternative do not disappear with time. Entry price matters, but a discount to an unverified model does not insure these risks.