Archived research. The era-1 framework is part of the Runchey Research archive (methodology era 1) and is no longer actively updated. Everything remains published at its original URL. Browse the archive
Evidence Ladder
Every finding in our analysis comes with an evidence grade (E0-E3). This tells you how much confidence you should place in each claim.
The Four Tiers
Claim without specific evidence
Claim with source reference but unverifiable
Claim supported by specific, verifiable data
Claim supported by multiple, cross-verified data points
Expected Distribution
A well-executed analysis has most findings at E2 or E3. Too much E0/E1 suggests shallow research; too little E3 suggests missing the most important conclusions.
| Grade | Target | Notes |
|---|---|---|
| E0 | < 5% | Avoid assertions without evidence |
| E1 | 10-20% | Context, but shouldn't drive conclusions |
| E2 | 50-70% | Majority of substantive findings |
| E3 | 20-30% | Ideal for key conclusions |
Calibration Examples
These examples show how we grade real-world findings. Use them to calibrate your own judgment.
“Management is aggressive with revenue recognition”
Evidence: None
Why: No evidence provided
“Revenue grew 23% YoY”
Evidence: 10-Q, page 8
Why: Quantified from audited filing
“CFO resigned unexpectedly”
Evidence: 8-K filing
Why: Verifiable primary source
“Former employees report quality issues”
Evidence: 3 Glassdoor reviews
Why: Referenced but unverifiable
“Short interest is 18% of float”
Evidence: Bloomberg, dated
Why: Quantified, verifiable
“Auditor noted material weakness”
Evidence: 10-K Item 9A
Why: Documented primary source
“Top 3 customers = 67% of revenue”
Evidence: 10-K Risk Factors
Why: Quantified concentration
“DSO up 15 days YoY”
Evidence: Calculated from 10-Q
Why: Quantified, calculated
“May struggle to refinance”
Evidence: Credit spreads +450bps
Why: Data verifiable, conclusion probabilistic
“Insider selling accelerated: $12M Q4 vs $2M Q3”
Evidence: Form 4 filings
Why: Quantified from regulatory filings
Boundary Rules
E1 vs E2 Boundary
Test: Can a third party verify the underlying facts?
- Verifiable primary source (10-K, 8-K, transcript) → E2
- Unverifiable source (channel checks, anonymous tips, 'industry experts') → E1
E2 vs E3 Boundary
Test: Multiple independent sources or time periods?
- Single primary source, single data point → E2
- Multiple sources confirming same finding, OR pattern across time → E3
Special Cases
| Source Type | Grade | Rationale |
|---|---|---|
| Short-seller reports | E1 | Unless primary evidence independently verified |
| Rating agency commentary | E1 | Unless primary data directly cited |
| News articles | E1 | Unless quoting primary source directly |
| Management commentary (in filing) | E2 | It's their statement, verifiable as 'what they said' |
| Calculated from filing data | E3 | Quantified, verifiable, reproducible |
| Channel checks | E1 | Valuable but unverifiable by third party |
| Forward-looking inference with data | E2 | Data verifiable even if conclusion probabilistic |