Management Quality Scorecard
Would you trust them with this money for five years?
This is the tool version of step 5 on How to Research a Stock and section 5 on the checklist. You can do that step in a 10-K. Framework 12 is the same questions in one write-up.
When to run it
- After you can explain the business (Framework 01) and before you size the lot.
- When the story on the internet is the founder and the founder is no longer running the day-to-day.
- When buybacks, deals, or a new compensation plan are doing more work than the product is.
Do not run Framework 12 to confirm you already like the CEO. If the scorecard only exists to decorate a bull case, skip it and write the bear case instead (Framework 02).
What the write-up is supposed to contain
A Framework 12 output should force:
- How they allocate capital: reinvest, buybacks, dividends, acquisitions — and whether those choices look like owners
- How they talk when they miss, not only when they beat
- What they are paid to do, in plain language
- Insider ownership and recent open-market Form 4 activity (pair with Framework 08 for the tape)
- A sentence you can use: yes / no / not enough to size this large
If the output is "strong leadership team" with no example of a capital-allocation choice, the run failed.
What this framework cannot do
- It does not tell you if the price is fair. That is Framework 03.
- It does not write the thesis. That is Framework 05.
- It does not size the position. That is Framework 06.
- It does not prove the earnings are cash. That is Framework 04.
- It is not a personality review and not a buy rating.
Walkthrough: AMZN as a first 12
Notes a first management pass should produce
- This is not a founder-operator story in the old sense. Grade the current allocators on what they do with cash now that the easy growth is behind them.
- The tell that matters: how they talk, and what they spend, when AWS is not the clean beat.
- Buybacks vs capex vs "leave it in the business" is the actual scorecard. Prime commercials are not.
- Form 4s: open-market buying would mean more than a letter. I have not pulled a year of them in this sitting.
Still open: compensation metrics in the last proxy, and a year of Form 4s. "Everyone knows Amazon" is not a grade.
Handwritten version: How to Analyze a Stock, section 5.
Full published run: AMZN analysis.
Do it yourself, then run 12
Before a credit:
- 10-K / proxy: capital allocation remarks + compensation discussion.
- Recent Form 4s — open-market buys and sells only. Ignore most option-related noise.
- Write the sentence: yes / no / not enough to size this large.
- Cover the ticker. If you cannot say the sentence without the brand helping you, you do not have a grade.
Then run Framework 12. Use Framework 08 if the only live question is the transaction tape. The checklist version is section 5.
Common questions
The CEO is famous. Does that count?
No. Famous is a search result. Allocation is a cash-flow decision.
Do I run 12 or 08 first?
12 first if you want the whole scorecard. 08 first if you already trust the story and you only want to know whether insiders are buying.
What do I run next?
Framework 05 if the invalidator is still missing. Framework 06 if the thesis is written and the question is size. Stop after that.
Run Management Quality Scorecard
Same demand as checklist section 5. Actions and track record, not the keynote. This is the optional faster pass — not a substitute for the five-year sentence.
Try AlphaLens Free → Use code REDDIT-FREE-TRIAL · No card required · Then $39/mo or $299/yrThen write the sentence. Or don't buy the name.