Glossary

This document is the key to the terminology used in the research. If you haven’t read Tetlock, Soros, or worked on the buy-side, that’s fine — every concept is defined below.

The glossary is organized into 7 blocks. Terms within each block are in alphabetical order.

Block 1. Methodology and Thinking (v3.0 Trader Grade)

Asymmetric payoff — a trade structure where potential gain (upside) meaningfully exceeds potential loss (downside). Example: upside +50%, downside -10% = 5:1 asymmetry. The foundation for entering trades even under moderate conviction.

Base rate — historical frequency of an outcome across similar situations. Before analyzing a specific case, superforecasters first ask: “How often did this happen in history?” This becomes the prior. Example: “Large European gigafactory bankruptcy rate 2020-2024 = 4 of 4 = 100%.” Kahneman calls this the outside view (below).

Bayesian updating — the method of revising the probability of a hypothesis as new data arrives. Superforecasters do this in small, frequent steps; they do not lock in fixed forecasts. Formally: posterior = likelihood × prior. In practice: “How much more likely is this fact if my hypothesis is true than if it’s false?”

Behavioral edge — advantage through understanding systematic crowd errors. Example: sell-side analysts fear deviating from consensus (career risk) → creating a predictable zone where the market underprices “extreme” views.

Brier Score — a metric of forecast quality. Formula: (forecast_probability − outcome)², where outcome = 1 (happened) or 0 (didn’t happen). Random forecast = 0.25. Average expert = ~0.20. Superforecaster = 0.12-0.15. Lower is better.

Buy-side — investment funds that buy assets (hedge funds, pension funds, asset managers). Pay for alpha (deviation from the market).

Catalyst — a specific event expected to shift the consensus and realize the thesis: earnings report, regulatory decision, data release, political event. Without a catalyst within a reasonable horizon (<2 years), a thesis becomes a position, not a trade.

Consensus-hug bias — systematic clustering of sell-side forecasts around the median. Driven by career risk: being wrong with everyone is forgiven; being wrong alone gets you fired. Consequence: consensus forecasts poorly capture “tail” scenarios.

Edge — competitive advantage in analysis. Three types: informational (you know a fact others don’t), analytical (you see the same data differently), behavioral (you see where the crowd predictably errs). Without an explicit edge claim, research is reference material, not a trade idea.

Expectations gap — the difference between actual fundamentals and what is priced into consensus. If the gap is large and valuation is not stretched, this is a trade idea. Formally: gap = F − E.

Expected Value / EV — probability-weighted return: EV = Σ (Pi × Returni). A key criterion for trade selection.

Falsification — a specific condition under which the hypothesis is considered refuted. Every forecast log entry must include a falsification condition.

FEV Framework (Fundamentals / Expectations / Valuation) — the buy-side analysis framework from Brett Caughran (ex-Citadel, DE Shaw, Maverick). F — what’s actually happening. E — what’s priced into consensus. V — at what price it trades. Expectations gap = F − E.

Forecast Log — a file where each probabilistic bet is recorded with date, horizon, and falsification condition. The basis for computing Brier Score.

Informational edge — see Edge.

Inversion (Munger) — Charlie Munger’s technique: “Don’t ask how you can be right. Ask how you can be wrong, and avoid that.” Applied in pre-mortem.

Outside view — assessing a problem through the statistics of similar cases before diving into specifics. The opposite is the inside view (focus on case uniqueness). Kahneman showed that the inside view systematically overestimates success. Solution: start with the outside view (base rate).

Pre-mortem — an exercise done before publishing: “Imagine that two years from now the thesis has failed. What mechanisms led to the failure?” Reveals blind spots in advance.

Prior — probability before new data. The initial anchor of the analysis.

Red team — deliberate criticism of one’s own thesis. Take the 3 strongest counter-arguments, honestly address each. If any cannot be answered — move it to Limitations.

Reflexivity (Soros) — George Soros’s insight: prices do not passively reflect reality; they shape it. A self-reinforcing cycle: rising prices → more capital → fundamentals improve → justifies rising prices. Reflexive loops last longer than fundamentals justify. Soros earned most of his capital on the moments of reversal of such loops.

Sell-side — investment banks and brokers (Goldman, Morgan Stanley, etc.) that sell research. They earn from research subscription fees, not alpha. Systematically consensus-hugging.

Superforecaster — a term from Philip Tetlock’s research. People whose Brier Score consistently ranks in the top 2% of forecasters. Their methods: base rate first, Bayesian updating, small incremental adjustments.

Track record — a documented history of forecasts with measurable outcomes. Without a track record, any methodology is narrative, not edge.

Variant perception — a differentiated view relative to consensus. “Alpha-generating ideas almost always diverge from consensus” (Street of Walls 2018). If variant view = consensus view → it’s not a trade, it’s reference.

Block 2. Corporate Finance and Valuation

FDI (Foreign Direct Investment) — direct investment in capital of companies in another country (≥10% stake, typically plant construction, equity in production). In context: Chinese FDI in LatAm is $180-200B cumulative 2005-2024.

ODI (Outbound Direct Investment) — capital outflow from China overseas. Regulated by MOFCOM and NDRC.

Offtake contract — a long-term purchase agreement for output (typically 5-20 years, fixed or formula-based pricing). Example: Tianqi has an offtake on lithium with SQM. Reduces producer risk and guarantees supply for the buyer.

Multiples — relative valuation metrics. Key ones: P/E (price to earnings), EV/EBITDA (enterprise value to operating profit), EV/Sales (to revenue), P/B (price to book). Used to compare companies within a sector.

Re-rating — when the market revises sector/company valuation up or down. Example: upon thesis confirmation that “Tianqi is a structural winner,” its P/E may be re-rated from 12 to 18-20.

SOE (State-Owned Enterprise) — a government-owned company. Chinese SOEs drive outbound capex in LatAm (CNPC, Sinopec, State Grid, China Three Gorges, COSCO). Regulated by SASAC.

Sunk capex — capital expenditures already incurred and non-recoverable. A port built for $3.6B cannot be “recalled.” Politics may change rules around it, but the asset physically remains.

Sizing — position size relative to the portfolio. Conviction-based: high-conviction → larger share. In public research, sizing is usually given in tiers (high / medium / low), not percentages — the reader sizes to their own portfolio.

Block 3. Trading and Investment Terms

Conviction — degree of confidence in an idea. Usually high / medium / low. Affects sizing.

Downside — potential loss. “Capped downside” = sunk capex protects from full writedown.

Long — buying an asset with the expectation of price appreciation.

Pair trade — simultaneous long of one asset + short of another (usually within a sector). Reduces market risk, isolates the relative-value thesis. Example: long Chinese LatAm miners / short US reshoring ETF.

Position vs Trade — position = held longer, no sharp catalyst; trade = sized to a specific event within <2 years. Catalyst >2 years = it’s a position, not a trade.

Short — selling an asset not owned, expecting price decline (via borrow).

Stop loss — exit condition at a fixed percentage drop. Risk management.

Ticker — exchange code. Format: XXXX.EXCH where EXCH = SH (Shanghai), SZ (Shenzhen), HK (Hong Kong), US (NYSE/NASDAQ). Example: 603993.SH = CMOC on Shanghai Stock Exchange.

Upside — potential return. Asymmetric upside = large potential for appreciation with limited downside.

Block 4. US Regulation and Geopolitics

BRI (Belt and Road Initiative / 一带一路) — China’s infrastructure initiative, launched in 2013 by Xi Jinping. Covers 140+ countries. In LatAm — 20+ countries signed BRI MoUs. Panama was the first in LatAm to sign (2017) and the first to withdraw (February 2025).

CFIUS (Committee on Foreign Investment in the United States) — an interagency committee reviewing foreign investment in US assets for national security. Can block deals. Similar mechanisms are emerging in China and LatAm countries under US pressure.

CIPS (Cross-Border Interbank Payment System) — China’s SWIFT alternative, launched in 2015. Operates with yuan. Growing actively in 2023-2026, especially with Russia, Iran, Argentina, Brazil.

Monroe Doctrine — US foreign policy doctrine from 1823, declaring the Western Hemisphere an exclusive zone of US influence. Modern interpretation (“Monroe 2.0”) reflects the strategy of displacing China from LatAm.

Nearshoring — the relocation of manufacturing to geographically closer countries. In US-China context: moving production from China to Mexico to serve the US market. Narrative 2022-2026, actively promoted by Atlantic Council and consensus.

OFAC (Office of Foreign Assets Control) — US Treasury department administering sanctions. Maintains the SDN list.

SDN list (Specially Designated Nationals list) — OFAC’s sanctions list. Listed entities are blocked from transactions through the dollar/US financial system.

Secondary sanctions — US sanctions against third countries/companies for dealing with sanctioned entities. Key pressure tool (Iran precedent). In LatAm, applied pointwise so far.

Section 301 — a section of the US Trade Act of 1974. Grants the President authority to impose tariffs against countries with “unfair trade practices.” Applied to China in 2018 (Trump 1.0), expanded 2024-2025. Core architecture of the tariff war.

Section 232 — a section of the US Trade Expansion Act of 1962. Tariff authority based on national security. Applied to steel and aluminum in 2018, expanded 2025.

SWIFT (Society for Worldwide Interbank Financial Telecommunication) — a global interbank messaging network. Backbone of the dollar financial system. The US can leverage SWIFT access as pressure.

USMCA (United States-Mexico-Canada Agreement) — the new NAFTA, in force since July 2020. Replaced NAFTA (1994). Contains rules of origin — regional content required for tariff-free intra-bloc trade. Reviewed every 6 years; the first review is 2026, creating uncertainty for Chinese FDI in Mexico.

Block 5. Chinese Regulation and Financial Infrastructure

海关总署 (General Administration of Customs of China) — China Customs. Publishes detailed monthly breakdowns of foreign trade by country and product. One of the best L1 sources.

MOFCOM (Ministry of Commerce / 商务部) — PRC’s Ministry of Commerce. Approves large outbound FDI projects. Maintains a public registry of ODI approvals.

NBS (National Bureau of Statistics / 国家统计局) — China’s statistical bureau. Publishes official macro data.

NDRC (National Development and Reform Commission / 国家发展和改革委员会) — the Development and Reform Commission. Controls major outbound infrastructure projects.

PBoC (People’s Bank of China) — China’s central bank. Manages currency swaps with foreign central banks.

SAFE (State Administration of Foreign Exchange) — China’s Foreign Exchange Administration. Regulates capital account and currency reserves.

SASAC (State-owned Assets Supervision and Administration Commission / 国务院国资委) — the state committee overseeing the largest central SOEs (~100 companies, including CNPC, Sinopec, State Grid, COSCO). De facto “super-ministry” of the state sector.

Sinosure (China Export & Credit Insurance Corporation / 中国出口信用保险公司) — state insurer for export and investment risks. Insures most Chinese LatAm projects. Its coverage = implicit sovereign guarantee.

CDB (China Development Bank / 国家开发银行) — the largest policy bank of the PRC, the primary source of outbound infrastructure lending. Together with Eximbank, extended ~$140B in loans in LatAm since 2005.

China Eximbank (Export-Import Bank of China / 中国进出口银行) — the second policy bank. Finances export and outbound projects.

Block 6. Sources, Exchanges, and Databases

EDGAR (Electronic Data Gathering, Analysis, Retrieval) — the SEC’s (US Securities and Exchange Commission) public disclosure system. Free, an L1 source for US-listed companies.

HKEX (Hong Kong Exchanges and Clearing) — the Hong Kong exchange. Central for Chinese companies with offshore structures (Tianqi 9696.HK, COSCO Ports 1199.HK, CK Hutchison 0001.HK).

L1-L5 (Source Hierarchy) — my classification:

L1 Primary — primary data (SEC filings, customs, central banks)
L2 Institutional — research institutes (LBNL, IEA, CSIS, Carnegie, Brookings)
L3 Industry — industry analytics (BNEF, Wood Mackenzie, Benchmark Mineral)
L4 Corporate — earnings calls, 10-K filings, patents
L5 Alternative Data — shipping (MarineTraffic), satellite, customs direct, LinkedIn hiring

Every claim in the research must have at least 2 independent L1/L2 sources.

Shanghai Stock Exchange (SSE / 上交所) — the main mainland China exchange. Code .SH. CMOC 603993.SH, Zijin 601899.SH.

Shenzhen Stock Exchange (SZSE / 深交所) — the second mainland exchange, tech/growth-oriented. Code .SZ. Ganfeng 002460.SZ, Sungrow 300274.SZ.

Block 7. Commodities, Logistics, Units of Measure

BESS (Battery Energy Storage System) — battery-based energy storage. Critical for solar+storage projects. Dominant suppliers: CATL, BYD, Sungrow, Tianneng.

bpd (barrels per day) — barrels of oil per day. The unit for measuring oil flows. 1 bpd ≈ 159 liters per day.

Brine lithium — lithium extracted from salt brines (Chile, Argentina, Bolivia — the “lithium triangle”). Alternative is spodumene (hard rock, Australia).

CAGR (Compound Annual Growth Rate) — annualized growth rate with reinvestment. Formula: (Vend/Vstart)^(1/n) − 1.

Crude oil — oil before refining. Heavy crude (Venezuela) requires specific refineries; light/sweet is more versatile.

FTZ (Free Trade Zone) — a territory under a special customs regime. In LatAm: Manzanillo (MX), Colón (PA), Mariel (Cuba). Chinese operators use FTZs as hubs.

GW / MW / kW — gigawatt / megawatt / kilowatt. Power units. 1 GW = 1000 MW = 1,000,000 kW. A typical hyperscaler data center = 100-500 MW.

GWh (gigawatt-hour) — energy unit (power × time). Battery plant nameplate capacity is given in GWh/year.

Heavy crude — see Crude oil.

LCE (Lithium Carbonate Equivalent) — standard unit for measuring lithium volumes, expressed as equivalent in lithium carbonate (Li₂CO₃). Allows comparison across forms (hydroxide, spodumene concentrate, etc.).

LFP (Lithium Iron Phosphate) — battery cathode chemistry (LiFePO₄). Dominant in China, cheaper than NMC, but lower energy density. Key chemistry for EV mid-range and BESS.

LNG (Liquefied Natural Gas) — liquefied natural gas.

NMC (Nickel Manganese Cobalt) — battery cathode chemistry with nickel, manganese, and cobalt. Dominates in Western gigafactory, more expensive than LFP, higher energy density.

Nameplate capacity — the plant’s designed capacity. Real utilization is typically 60-90% of nameplate.

PPA (Purchase Power Agreement / Cathode Precursor) — in energy: a long-term contract to buy electricity from a renewable project. In batteries: precursor refers to cathode precursor chemistry (chemical intermediate between raw material and cathode).

REE (Rare Earth Elements) — rare earth metals (17 elements). China dominates in processing (~85% globally).

SPOT price — current market price (as opposed to forward/futures).

Spodumene — lithium ore (hard rock). Primary source in Australia (Greenbushes). Alternative to brine.

TEU (Twenty-foot Equivalent Unit) — standard unit for measuring container throughput (20-foot container). Chancay mega-port nameplate = 1M TEU in the first phase.

tpa (tons per annum) — unit of production capacity in mining and processing.

Country Abbreviations (ISO 3166-1 alpha-2)

Code	Country	Spanish/Portuguese Name
AR	Argentina	Argentina
BO	Bolivia	Bolivia
BR	Brazil	Brasil
CL	Chile	Chile
CO	Colombia	Colombia
CR	Costa Rica	Costa Rica
CU	Cuba	Cuba
DO	Dominican Republic	República Dominicana
EC	Ecuador	Ecuador
GT	Guatemala	Guatemala
HN	Honduras	Honduras
MX	Mexico	México
NI	Nicaragua	Nicaragua
PA	Panama	Panamá
PE	Peru	Perú
PY	Paraguay	Paraguay
SV	El Salvador	El Salvador
UY	Uruguay	Uruguay
VE	Venezuela	Venezuela

Specific Cases and Events Mentioned in the Short Brief

Chancay Megaport (Puerto de Chancay) — a deepwater port in Peru, 80 km north of Lima. Operated by COSCO (60%) + Volcan Compañía Minera (40%). First phase inaugurated November 14, 2024, with Xi Jinping and President Boluarte of Peru in attendance. The first direct Pacific transit route Asia–LatAm bypassing US ports. Reshapes the regional logistics map.

Cauchari-Olaroz (Cauchari) — the largest lithium brine project in Argentina (Jujuy Province). JV of Ganfeng Lithium (51%) + Lithium Argentina (formerly Lithium Americas) (44.8%) + JEMSE (local). Commercial production began in 2023; ramp to 40,000 tpa LCE expected by 2027.

Las Bambas — a copper mine in Peru. Bought by CMOC (Cathay Fortune) from Glencore in 2014 for $7B. One of the 5 largest copper mines in the world. A flagship asset in China’s LatAm portfolio.

Panama BRI Withdrawal — on February 6, 2025, Panama officially announced its withdrawal from the Belt and Road Initiative, the first LatAm country to do so. The decision followed a visit by US Secretary of State Marco Rubio. Chinese operator concessions were reviewed, in particular Hutchison Panama Ports.

SQM (Sociedad Química y Minera de Chile) — the largest Chilean lithium and iodine producer. Listings: NYSE (ADR) + Chile. Tianqi Lithium owns 22.16% via a cascade structure (purchase from Nutrien in 2018 for $4.1B). Vote/board influence is subject to ongoing legal disputes with the Ponce Lerou family group (the main Chilean shareholder).

Argentina-China Currency Swap (CNY swap) — a bilateral agreement between PBoC and BCRA to exchange currencies. Activated in 2009, renewed multiple times. Current size ~RMB 130B (around $18B). Milei criticized the swap after his inauguration (December 2023), but the renewal was agreed in 2024. An example of economic pragmatism vs ideology.

How to Use This Glossary

In the Short Brief and Full Article text, terms are marked with an arrow [→]. That means — “see the glossary.”
If you encounter a term not in the glossary, let me know and I’ll add it.
The glossary is a living document; version 1.0 will expand with each new article.

Author: Ivan Kokin (伊万) 🐉

Version 1.0 · 2026-04-21