The Five Questions & the Source Stack

Learning objectives

By the end you can:

1. State the five questions from memory and, for each, name what it really asks, which prior-phase skills answer it, and what "good" looks like, so that any business you meet is immediately five questions rather than a blank page.
2. Explain the ROIC-above-WACC-plus-reinvestment master idea as the single organizing principle the five questions serve, and show why growth without that spread destroys value.
3. Assemble the four-layer source stack in order (the company's own story, the transcripts, ten years of numbers, the competitor-and-bear view) for both a US and an Indian company, knowing what each layer is highest-signal for and where to get it free.
4. Skim a US 10-K and an Indian annual report in the professional read order in 45–60 minutes: Business → Risk Factors → MD&A → the three statements → segment note → cash-flow → related-party note → contingent-liabilities note → auditor's report (incl. India CARO) → India shareholding-and-pledge table, extracting the right thing at each stop.
5. Apply the skim/ignore triage (read ~30 pages deeply, skim ~50, ignore the rest knowing what you are ignoring) and defend why boilerplate, generic risks, MD&A adjectives, and property lists are ignorable.
6. Run the Ctrl-F tripwire list ("related party," "pledge," "contingent," "going concern," "restated," "auditor," "exceptional," "one-time," "guarantee," "receivable") and explain why each word is a tripwire and what it triggers.
7. Do a rough ROIC-vs-WACC read and a rough "what's priced in" read in seconds from screener/aggregator numbers, as the two gut-checks that orient the whole teardown.
8. Navigate a named real filing under time pressure to answer targeted questions ("find X in this filing in N minutes"), and produce the 8-line first-impression output every time.

Prerequisites & connections

Builds on. M0.01 first stated the five questions and the ROIC>WACC idea; here they get their full toolkit. M1.10 taught the anatomy of both filings, the spreading template, and seeded the statement-read checklist v1 (§4.14) that becomes this module's artifact. All of Phase 2 lives inside the read order (the red-flag Ctrl-F list is the ★ pass of the quality-of-earnings checklist). Phase 3 supplies the "what's priced in" reverse-multiple read; Phase 4–5 supply the moat and sector lenses you apply in seconds; Phase 6 gives you the discipline to read the bear case honestly. The ~50 weekly reads are the reps that make the read order feel like walking, not spelling.

Feeds into. M8.02 (the 1–2 hour teardown) runs on the source stack and fast read you build here, which is its first thirty minutes. M8.03–M8.04 (the 2–3 day deep dive) expand every layer: the ten-year numbers get rebuilt by hand, the transcripts multiply to 4–8, the bear note becomes a full steelman. M8.05 certifies the whole system under time pressure. M8.06 takes the source stack past the annual report and the 10-K into the six documents the stack keeps naming but never opens. Those are the draft red herring prospectus, the quarterly result, the earnings release with its deck and transcript, the 8-K, the ownership filings and the rating rationale. The artifact (the 45–60 minute checklist) becomes a permanent field tool you run weekly for decades.

Competency map. This is the foundation of C10, the signature skill (run the teardown and deep dive on a novel company). It directly serves C1 (read the language of business, now fast) and C3 (understand a business model cold, now from the right sources in the right order).

4.1 Why speed is a skill, not a shortcut

Thirty pages out of three hundred. That is what a professional first read of a filing actually covers, and the other 90% is ignored on purpose.

There is a lazy fast and a skilled fast, and they look nothing alike. The lazy fast skims everything equally, reads the glossy, quotes the adjusted number, and forms an opinion from the investor deck. The skilled fast reads the right thirty pages, in the right order, knowing exactly what each page can and cannot tell it. Speed, for an analyst, is not reading faster. It is knowing what to ignore, and being right about it.