What is a Conviction Score?

The problem with raw 13Fs

A typical hedge fund 13F shows 50-200 positions. Most of them are noise: partial hedges, index-replication padding, leftovers from old themes, even mistakes. Only 5-15 positions actually represent the manager's real conviction.

Three signals of conviction

1. Position size relative to typical sizing. If a manager normally holds 1-2% positions and has a 15% position, that's a real bet.
2. Held across multiple quarters. A position added to over 4-8 quarters shows compound conviction. A flash position might be a hedge.
3. Held through drawdown. If the stock fell 20% and the manager added, they believe in it. If they cut, they didn't.

HoldLens Conviction Score

Coming in v0.4: a 0-100 score that combines all three signals into one number per position. A position with a Conviction Score of 90+ means: large for this manager, held for 4+ quarters, added through downturns. That's the difference between a real bet and a portfolio filler.

Why you should care

Most retail investors who try to "follow the smart money" copy the wrong positions. They see Buffett owns 200 stocks and figure they should buy a basket of his top 10. But Buffett's real betsare 5-7 positions — the rest is index-replication for the insurance float. Conviction scoring tells you which is which.

Conviction Score is currently a manual indicator. Algorithmic version ships v0.4. Methodology.