Quality Guidelines & Key Acceptance Criteria

View These Guidelines in PDF Format

This document sets a common standard for research on SumZero. We ask that members familiarize themselves with the community’s expectations before posting research on the site.

All ideas posted on SumZero are evaluated for quality before being approved for publication. Our evaluation process is broadly summarized below.

Key Tenets of SumZero Research

Research on SumZero stands apart from sell-side research and independent research in these key ways:

• Actionable: All recommendations require a clear directional call: Long or Short. No Holds.
• Fundamentally-Driven: All research must be grounded in fundamental analysis and utilize well-accepted valuation techniques to arrive at a fair value estimation.
• Single Security Focus: With very limited exception, all research must focus on a publicly-traded security. This can include Stocks, Fixed Income, ForEx, Commodities, Preferreds, ETFs, and other liquid instruments.
• Forward-Looking: All research must be forward-looking by nature. Retrospective case studies will not be accepted.
• Meaningful Upside: Ideas posted on the site must offer a reasonable expected return against prevailing prices. Ideas with less than 5-10% expected upside at the time of publication tend to be rejected.
• Ownership: The vast majority of ideas on SumZero are owned by the analyst directly or by the fund where the analyst works. We believe this alignment of interests is a key differentiator.

Required Thesis Sections

All theses must contain substantive discussion on each of the following topics to be accepted:

• Basic Business/Product Analysis
• Valuation
• Target Price Justification
• Discussion of Risks
• Timeline/ Investment Horizon Discussion
• Trade Feasibility (liquidity, inventory, etc.) - When Applicable

Strongly Preferred Thesis Sections

The following sections are strongly preferred for ideas on SumZero:

• Catalyst Discussion
• Variant View (Opportunity Justification)
• Channel Check/Primary Research Work
• Formal Valuation Model Attachments
• Industry Overview/Comp Analysis
• Footnotes and/or Research Citations

Key Acceptance Criteria for SumZero Research

• Complete Transparency
  All posts must fully display the author’s name and current firm name. If the member has no current employer, the most recent employer needs to be displayed (e.g. Formerly at X Capital). Any member who cannot display this information should notify us at access@sumzero.com. Ideas that do not include this information will be rejected, including incomplete names (e.g. John T), anonymized firm names (e.g. Private Fund), or outdated employer funds.
• Up-to-Date Metrics/Figures
  All numbers/figures should be up to date at the time of publication. On occasion, we encounter research that is several months old and/or research that is overly reliant on figures from outdated sources. These pieces will be rejected.
• Original Content
  The vast majority of text in a thesis should be original and should not excessively cite third-party analyst reports, public filings, conference call transcripts, etc. Those ideas that incorporate an excessive amount of unoriginal work will be rejected.
• Actual Analysis / Not Statements of the Obvious
  Submissions that overly rely on statements of simple fact which include descriptions of business/products, management bios, compensation schemes etc. are not ‘original’ or analytical. These pieces will be rejected. Most strong theses will include a minimally necessary description of the company and its key attributes, but will quickly shift to justifying why the broader price target is appropriate given the prevailing situation with the author’s original language.
• Compliance Certifications/Representations
  A number of certifications/representations are required at the time of posting. These include certifications related to the non-use of material non-public information, trade rumors, or otherwise unsubstantiated information in your thesis. Members must also certify that they have the approval of their employer to post research, and that they are in compliance with various regulatory bodies. Members unwilling to affirm these items will be prevented from posting.

Key Rejection Criteria

• Plagiarism
  Plagiarism of any kind is unacceptable. We employ software to identify it, and we actively attempt to prevent it from reaching the site. Members who wish to leverage others’ work should include citations and relevant attribution as necessary. If any member identifies the unapproved use of others’ ideas/words, please notify access@sumzero.com immediately.
• Duplicated Words/Boilerplate Language
  We require that submissions to the site exceed a minimum of 1,000 words. The average thesis on SumZero is well over 2,000 words in length. Analysts attempting a minimally comprehensive effort on a thesis can easily exceed the 1,000 word minimum. Ideas with repeated words/paragraphs or boilerplate disclaimers simply to exceed the minimum word count will be rejected.
• Fund Ads/ Services Ads
  Language in write-ups designed to promote a fund or a service of any kind is unacceptable. Any write-up that contains promotional language for a product or service in the thesis section or the attachments will be rejected.
• Unreasonable Position Promotion
  A sober analysis built on rational expectations is expected. There are many legitimate situations in which an analyst’s expectations can be considered too optimistic or too pessimistic by the community (and the market in general). We expect this kind of contrarian work. Strongly variant views must be justified, however, with reasonably plausible evidence and additional support. Ideas where the analysis is used to excessively portray a situation beyond any kind of reasonable justification will result in rejection.

Disclaimer: Opinion vs. Quality of Opinion

We do not expect to agree with all members’ recommendations. SumZero is a diverse community of sophisticated professionals, and the community is capable of making up its own mind when it comes to the merits of any argument presuming the information is sufficiently well-supported. The operative question we ask is “Is the research thorough enough and good enough to deserve to be read?” Our standards are designed to evaluate the quality of arguments made, the depth of analytical effort, and the extent to which an analyst presents independent support of his/her rationale. They are not designed to qualify others’ opinions.

Approved ideas must meet and exceed a certain minimum in terms of quality. Those that fall short will be rejected by our dedicated QA team before publication.

Useful Stats:

• Minimum Requirements on Length: 1,000 words
• Average Recommendation Length: ~2,300 words
• Reports w/ 1 or More Attachments: 70%
• Reports w/ 2 or More Attachments: 20%

Additional Comments/Questions

If you have further questions about SumZero research standards and/or posting your ideas on the site, please contact the SumZero team at access@sumzero.com.