Guideline:Due diligence of new sources

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Note: Always link the exact page of the source when citing.

When occurring new sources or opinions we need to perform due diligence on them in order to determine their credibility.

Our goal is to only include highly reliable data into our models or probability weigh opinions/unspecified sources. See: Investment philosophy

Methodology

  • Where is the data/information coming from? (e.g. "no source given", "source familiar with the matter", "specified source", "small survey", "extensive survey/study", "company report", "institutional survey e.g. bls"
  • How strong is the methodology to get to the data? How representative is it? How much can be rely on it?

Opinions

"On the topic of which opinions to consider: It is not necessarily the size of the author but the track record, sophistication/methodology, quality of research, strength of arguments and so on.

If you include opinions of unknown people (which is totally fine) make sure their work standards are very high and double check parts of their work in the beginning to make sure they are using good primary data and displaying research proportionally to it's importance.

The general rule is to only use opinions of authors who we regard as highly credible so this initial "due diligence" of a new author is necessary.

I think there are certainly very good unknown people and it's good to add them to our list of good sources. In general you will obvs. find more unsophisticated opinions among them or people who spin news in order to get attention.

In the end opinions should be weighted by credibility based on the above mentioned criteria. Funds which large macro research teams like bridgewater will rank higher compared to unknown people everything else being equal. Unknown people will rank high if their research/arguments is exceptionally good. "

Criteria Summary
  • Strength of track record
  • Sophistication of research (great primary sources used, detailed, on point)
  • Strength of Arguments (credibility suffers if we spot BS arguments)
  • Accuracy/objectivity of arguments (no exaggerations, no excessive "narrative" or story telling)
  • How well do we understand the research of the author?

Bonus point but no criteria for credibility: How easy is it to understand the work of the author overall?

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