SNOWBALLHARE PLAYBOOK
SnowballHare Howard Marks-Inspired Cycle and Risk Score
A research-prioritization framework for testing whether market psychology and price adequately compensate cycle, credit, liquidity, and crowding risk.
Six scoring inputs
| Input | Weight | What to check |
|---|---|---|
| Cycle location | 20% | Recovery, expansion, optimism, stress, or forced selling |
| Market psychology | 20% | Fear, relief, greed, complacency, panic, or indifference |
| Price versus expectations | 20% | Growth, margins, rates, and outcomes embedded in price |
| Risk compensation | 15% | Expected upside relative to bear-case loss |
| Liquidity and credit | 15% | Rates, spreads, refinancing, covenants, and liquidity |
| Crowding | 10% | Ownership, consensus, positioning, and unwind risk |
Score bands
| 80–100 | Paid for risk | Fear or stress appears reflected. |
|---|---|---|
| 65–79 | Selective | One major variable needs confirmation. |
| 45–64 | No clear edge | Insufficient asymmetry. |
| 0–44 | Avoid chase | Optimism, crowding, or liquidity risk is uncompensated. |
The score is not a price target or buy/sell recommendation. High scores still require security-level fundamental analysis.
Worked example
A crowded rate-cut basket scores 42 when valuation and positioning are hot, earnings revisions are flat, and probability-weighted expected return is only 1.75%. The output is “avoid chase,” even if rates ultimately decline.
Hard invalidation rules
- Cycle evidence changes materially.
- Credit and liquidity contradict the thesis.
- Price embeds a more favorable outcome than modeled.
- Bear-case loss exceeds portfolio tolerance.
- Crowding creates forced-unwind risk.