Capital Returns
What did the capital committed actually return?
Measure the outcome of each consequential decision against the capital it committed, over a long enough horizon to see the result.
Capital Returns & Equity Intelligence
Billion-dollar outcomes begin as decisions.
CREI studies the executive decisions behind outcomes exceeding a billion dollars: what was decided, who decided it, and how those decisions performed over time. From that record, CREI is building new investment models.
The focus
Outcomes are reported. The decisions behind them rarely are.
Markets price results: earnings, write-downs, acquisitions that create or destroy value. Far less attention goes to the decisions that produced those results, the people who made them, and whether the same decision-makers keep getting them right.
What was decided
The consequential choices behind outcomes exceeding a billion dollars, in either direction: acquisitions, capital programs, market entries, exits, and the commitments that went with them.
Who decided
The companies and the executives responsible, identified from the public record, and the reasoning they gave at the time.
How it performed
What happened next, tracked over years rather than quarters, so a record of decisions can be compared with a record of results.
The approach
From decisions to investment models.
Identify the decisions
Find the executive decisions that drove outcomes exceeding a billion dollars, gains and losses alike.
Attribute them
Record the company, the executives accountable, the alternatives available, and the stated rationale.
Track performance
Follow each decision over time. Every entry is timestamped and its resolution date is fixed before the outcome is known.
Build the models
Use the accumulated record of decisions and decision-makers to build and test new investment models.
Capital Returns & Equity Intelligence
What a decision returned. What it reveals.
Equity Intelligence
What do decisions reveal about the people and companies making them?
Understand how the quality of executive decisions, tracked over time, shows up in the long-term value of a company’s equity.
Principles
Judge the decision, not only the result.
Three questions, kept separate
The original reasoning
Was the choice supported by reasonable evidence, alternatives, and explicit assumptions?
Execution and delivery
Were commitments delivered, and were emerging problems addressed?
Outside conditions
What changed beyond the decision-makers’ control?
A good outcome does not by itself prove sound judgment, and a poor outcome does not by itself prove a poor decision. That is why CREI records the decision before it knows the result.
About
Founded on decision architecture.
CREI was founded by Andrew V. Vasserman, founder of Logyc and author of The Decision Before the Decision, which treats every major business decision as a hypothesis about reality that can be examined before it is made, and judged fairly after.
Current status. CREI is building its research and models. It holds no securities, makes no investments, manages no outside capital, and offers no investment products or advice.