Memorandum
I. Failure is a feature of analysis
In any disciplined domain, analysis includes the possibility of failure. A claim must be capable of becoming inadmissible. A model must be capable of breaking. Without that capacity, the exercise is not analytical. It is narrative.
II. Finance rarely permits termination
Modern valuation culture rarely stops. When assumptions are threatened, they are revised. When a thesis is contradicted, the time horizon is extended. When evidence becomes inconvenient, it is reclassified as temporary.
This is why most financial analysis never fails. It simply never stops.
III. A framework without stopping rules cannot be falsified
A claim that cannot terminate cannot be falsified. It can only be edited. In such an environment, “analysis” becomes an instrument of justification: it produces coherence, not admissibility.
The reader is then left with competing narratives that cannot be adjudicated—because no conditions exist under which the narratives must stop.
IV. Stopping rules are a condition of admissibility
ABSA treats termination as a condition of admissibility. Analysis must possess boundary conditions. It must specify failure modes. It must contain the capacity to refuse conclusions when structure does not permit them.
Without stopping rules, valuation is not “rigorous.” It is unbounded.
Boundary Statement
This memorandum asserts the necessity of stopping rules. It does not disclose the operational boundary conditions, failure modes, or termination criteria used by ABSA classification doctrine.
V. Consequence for the investor
The investor who lacks stopping rules is defenseless against sophistication. Elaborate spreadsheets can be mistaken for disciplined analysis. Complex valuation narratives can be mistaken for evidence.
ABSA exists to impose structural termination: to state when analysis is permitted to proceed—and when it must stop.
ABSA does not provide investment advice and does not solicit transactions. This memorandum is interpretive doctrine only.