Funds ask for one page because one page is what gets read. It is also a test: a constraint that forces you to decide what the idea actually is. Candidates who submit six pages have usually not made that decision, and the reader can tell from the first paragraph.
The structure
Roughly this order, roughly these proportions. It is a convention rather than a rule, and departing from it should be a decision rather than an accident.
| Section | Length | Contains |
|---|---|---|
| Recommendation | 2 lines | Long or short, price, target, return, time horizon |
| Thesis | 3 to 4 lines | What the market believes, what you believe, and why |
| Business | 2 to 3 lines | What it does and how it makes money, no history |
| Why mispriced | 3 to 4 lines | The mechanism: neglect, complexity, a temporary problem, a wrong number |
| Valuation | 3 lines plus a small table | Method, the two assumptions that drive it, bear, base and bull |
| Catalysts | 2 to 3 bullets | Dated where possible |
| Risks and what would make you wrong | 3 bullets | Specific, observable, ranked by cost |
| Sizing | 1 line | The position and the reasoning behind it |
Lead with the answer
The first two lines carry the recommendation, the price, the target and the return. Not context, not the industry, not the history of the company. A reader who stops after the first line should still know what you want them to do and what it is worth.
This inverts how most people were taught to write, and it is the single highest-value change available. "Long Croda at 4,180p, target 5,900p, 41 per cent upside over eighteen months, on a mix shift the market is treating as cyclical" is a complete first sentence. A paragraph about the specialty chemicals sector is not.
What to cut
- Company history. Nobody is buying the founding date.
- A full description of the industry. Assume a reader who knows the sector, because they usually do.
- Management biographies, unless a specific person is the thesis.
- Every risk you can think of. Three specific risks beat ten generic ones, and a list of generic risks reads as a disclaimer.
- The full model. One small table of outputs, not the workings.
- Adjectives. Compelling, attractive, robust and significant are all replaceable with numbers.
Presenting the numbers
One table, at most. The useful one is nearly always the scenario table: bear, base and bull, with the price target in each, the probability you would assign and the resulting expected value.
Show the two or three assumptions driving the outcome, not the twenty inputs. A reader wants to know which number they need to disagree with, and a dense table hides that. If your bull case requires the margin to reach a level the company has never achieved, put that on the page. Hiding it does not make it less true and it does make you less credible when they find it.
The mistakes that get a memo skimmed
- Burying the recommendation in paragraph four.
- A thesis that is a description. If the sentence would be equally true whether the shares were worth twice or half the price, it is not a thesis.
- Unquantified claims: significant upside, attractive valuation, strong moat. Give the number or delete the sentence.
- Risks that are not risks. "The share price may fall" tells the reader you had nothing.
- Consensus without evidence. If you claim the market is wrong, quote what the market thinks: the consensus estimate, the implied multiple, the published argument.
- Formatting that makes the page hard to scan. Headings, short paragraphs and one table. A wall of text will be read diagonally.
How it differs from a pitch out loud
A verbal pitch can follow the reader. Written, you get one pass and no chance to react, which changes two things. Front-load harder, because you cannot see them losing interest. And anticipate the obvious objection in the text rather than waiting to be asked, because the reader will otherwise finish the page holding it.
One paragraph headed "the bear case and why I disagree" does more for credibility than any amount of enthusiasm, and it is the section most often missing.
Using it as a practice discipline
Write one a month on a company you actually follow, then file it with the date and the price. The value compounds in two directions. You build a record you can show a fund, and you build the habit of committing to a number before you know the answer, which is the only way to find out whether your judgement is any good.
Re-read the old ones after six months. The pattern in your own mistakes is more instructive than any book on investing.
Frequently asked questions
How long should an investment write-up be?
One page when a fund asks for one, and treat the constraint as part of the test. Longer memos signal that the writer has not decided what the idea is. Where a case study explicitly allows more, the first page should still stand alone.
What goes in the first two lines of a memo?
The recommendation, current price, target price, implied return and time horizon. A reader who stops after the first sentence should know what you want them to do and what it is worth. Context and industry background belong lower down or not at all.
How should scenarios be presented?
One small table with bear, base and bull cases, the price in each, the probability you would assign and the resulting expected value, plus the two or three assumptions that drive the difference. The reader needs to see which number to argue with.
Should a write-up include the bear case?
Yes, in its own short paragraph, with your answer to it. It is the section most often missing and it does more for credibility than any other part of the page, because it shows you have argued with yourself before asking someone else to take the risk.
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