- Present the current state of affairs.
- Present the inefficiency embedded in the state.
- Explain the problem that has thus far prevented a correction of the inefficiency.
- Present the new development that now permits the correction.
Equity Private goes on to say:
An amazing amount of clarity can be introduced into investment theses just by framing the problem in this fashion. This, in my view, is the essence of deep thinking as a prerequisite to action, the foundation of my approach to contrarian investing, and why I love buyouts.