Process Frame – The Meta System

One original thought is worth a thousand mindless quotings.

Diogenes of Sinope

Overview

We have grouped the eight Frames of The Equity Toolkit on two levels. The Analysis Frames are those tools that directly apply to investment analysis – financial analysis, valuation etc. In contrast, the Application Frames are tools that whilst having some direct input into investment analysis, also help in understanding how to apply and interpret the Analysis Frames. The Systems, Behaviour and Probability Frames are all important fields in their own right that fulfill both this primary analytical role and secondary application role.

The Process Frames also fulfill both these roles and in one sense this Frame just represents a basket for gathering all our remaining tools. However, it is also helpful to think of the Process Frame as being a meta-Frame, containing a basket of tools that are not only applicable to any type of analysis, but also essential for undertaking that analysis well. In a sense they are the tools which build our core Framework Foundation upon which our remaining analysis hangs.

The three key baskets in our Process Frame are:

  • Analytical Tools – A collection of basic analytical concepts (materiality, delta vs level, consistency) which are both simple to describe, but quite profound in their implications.
  • Information Tools – The modeling and presentation of data, as distinct from statistical analysis.
  • Thinking and Learning – The meta-tools of the brain.