The idea that individual investors cannot outperform the market is widespread, and often justified. The problem, however, is not that outperformance is impossible, but that it requires a disciplined process, sound analytical judgment and the right tools. This course, together with its companions, is designed to develop exactly those capabilities: to help you analyze companies more rigorously, make better-informed decisions and build an investment process aimed at outperforming the relevant benchmark over time.
AuditAlpha™ is Your Science’s systematic stock-analysis engine. It comprises three analytical frameworks, one per investment horizon: PulseLens (days to months), BottleneckLens (six to twenty-four months) and CompounderLens (ten years and more). Their methods differ, but they share the same principles: structured data retrieval, explicit decision rules, documented reasoning and a complete audit trail.
Over a decade or more, compounding rewards a small number of businesses disproportionately: those that earn high returns on capital and can reinvest at similar returns, year after year. Many companies that look like compounders today, with fast growth, expanding margins, and a compelling story, fail that test over time through deteriorating earnings quality, eroding competitive advantages, strained balance sheets, or poor capital allocation. This course teaches you to tell the two apart. You learn to test whether earnings are real and durable, whether returns on capital are sustainable, whether the balance sheet can withstand adversity and whether management allocates capital well; to assess competitive advantage and reinvestment runway; to estimate long-term shareholder return under explicit Bear, Base and Bull scenarios and judge what the current price already assumes; and to recognize the evidence that would break a long-term thesis.
The goal is not simply to identify great companies, but to invest in them at prices that allow for attractive long-term compounding—and to recognize when they cease to qualify as compounders.
The CompounderLens module of AuditAlpha™ brings the method to life on real companies, demonstrating every stage of a systematic, transparent and fully documented analysis. The software guides its users step by step, so no prior experience with it is required. The analytical skills, however, are yours to keep and apply with or without the software.
Course structure
The course is organized in three parts that build on each other.
Part 1 covers the economics of long-term compounding and the Fundamental Durability Gate: why strong recent growth is not sufficient for a ten-year investment, and how seven criteria (earnings power, accounting quality, sustainable returns on capital, cash-flow authenticity, balance-sheet resilience, concentration risk and capital stewardship) are applied as a strict gate rather than averaged into a score.
Part 2 covers the mechanisms that keep a durable company compounding, and how they are evidenced: competitive advantage, pricing power, switching costs, reinvestment runway and capital allocation; the gathering and testing of evidence through primary sources, deterministic tests and LLM-assisted qualitative questions, each documented with its reasoning and confidence level; and the construction of Bear, Base and Bull total-shareholder-return scenarios, together with the growth the current share price already implies.
Part 3 covers real-world cases at past decision dates: the complete framework applied from the underlying filings through the durability gate, the competitive-advantage and reinvestment analysis and the valuation to the final verdict, followed by long-term monitoring and the thesis breakers that would justify reconsidering a holding.
Contents
- Long-Term Compounding and the Fundamental Durability Gate
- 1.1What Makes a True Compounder?
- 1.2Why a Gate, Not a Score
- 1.3Earnings Power
- 1.4Accounting Quality
- 1.5Sustainable Returns on Capital
- 1.6Cash-Flow Authenticity
- 1.7Balance-Sheet Resilience
- 1.8Concentration Risk
- 1.9Capital Stewardship
- Competitive Advantage, Evidence and Long-Term Return
- 2.1Competitive Advantage and Structural Moats
- 2.2Pricing Power and Switching Costs
- 2.3Reinvestment Runway and Capital Allocation
- 2.4Primary Sources: Reading Company Filings and SEC EDGAR
- 2.5Deterministic Tests and Their Limits
- 2.6LLM-Assisted Questions: Resolving, Corroborating and Complementing Evidence
- 2.7Confidence Levels and Analyst Review
- 2.8Scenario-Based Total Shareholder Return: Bear, Base and Bull
- 2.9What the Price Already Assumes: Implied Growth
- 2.10Operating the CompounderLens Engine
- Real-World Cases, Monitoring and Thesis Breakers
- 3.1Study case 1 (e.g., Visa)
- 3.2Study case 2 (e.g., Moody’s)
- 3.3Reading a Full Audit Trail
- 3.4Monitoring a Long-Term Thesis
- 3.5Thesis Breakers: When a Compounder Stops Being One
Format and delivery
- Online delivery via Microsoft Teams
- 8 two-hour sessions (e.g., 10:00–12:00 or 15:30–17:30), structured as 3 + 3 + 2 over four weeks
- Over 80 pages of professionally written lecture notes covering methodology, cases and engine operation
- Limited class size to ensure individual attention
- Course-related support by email, with brief follow-up calls at the instructor’s discretion
- Instructor: Prof. Norbert Poncin, founding director of the Department of Mathematics and First Chief Scientist at the University of Luxembourg, with extensive experience in mathematical modeling, statistical analysis and research consultancy
- Educational access to AuditAlpha™: once the AuditAlpha™ platform is successfully launched and can be offered under the applicable regulatory framework, course participants will receive six months of free access to its educational version, for practice and course-related exercises, subject to fair-use limits. The course itself is complete without it.
Designed and delivered by Your Science | Scientific Consulting.
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