Methodology Read . Recipe Versus Paragraph

Friend forwards a PMS factsheet on Wednesday evening. Twelve pages of marketing. One page titled "Investment Approach". The word "systematic" appears four times. The actual rule appears zero times.

"How is this different from what RupeeCase does."

Opened both side by side. The PMS brochure had a paragraph. The methodology page had a recipe. That is the whole difference.

Four reads decide whether a strategy is a process or a paragraph.

Universe. Which names are even eligible. RupeeCase Allcap says Nifty Total Market, roughly 750 stocks, named index, liquidity floor inherited. Typical PMS approach says "large and mid quality companies". One is a contract. The other is an adjective.

Entry rule. Which fifty of the 750 get in. RupeeCase says top 50 by a ranked screen applied on the same close every fortnight. PMS says "bottom up high conviction selection". Conviction is a feeling, not a rule. Two people reading the same brochure end up with two different baskets.

Weight method. How much of each name. RupeeCase says equal weight, two pct per name, declared. PMS says "conviction weighted up to nine pct per name". A bound is not a method. One name at 8.5 pct and another at 1.2 pct on the same conviction word.

Cadence. When the rule fires again. RupeeCase says every two weeks. Twenty six firings per year. Trade list published. Cost line measurable at 0.2 pct per leg. PMS says "as and when warranted by market conditions". That could be four firings or one. Whoever is at the desk decides.

Three rules I keep coming back to. If you cannot reproduce the basket from public data, the discretion is the strategy. A weight bound is not a weight method. Cadence in days or the cost line is unknowable.

The brochure tells you what they want to do. The methodology page tells you what they will do, in the order they will do it, on the universe they will do it to. One is a poem. The other is a contract