Noise-to-Fundamentals Filter
Remove emotion, isolate material evidence, and return decisions to fundamentals
- Difficulty
- Moderate
- Time to result
- ~weeks to results
- Steps
- 5
- Confidence
- 98%
The filter begins by defining the actual decision and the fundamentals that should determine it. Incoming news is then divided into material evidence, uncertain interpretation, and noise. The decision-maker deliberately removes political identity, fear, excitement, and attachment to particular companies or managers from the evaluation. Only information that changes cash flows, risk, valuation, constraints, or required outcomes should alter the decision. Awareness of what remains unknown prevents false certainty, while a preconstructed long-term portfolio reduces pressure to react to every headline. The method does not mean ignoring risk; it means distinguishing risks that change the investment case from commentary already reflected in prices or irrelevant to the investor's objective.
Origin
Jose Minaya described this as both an investing discipline and a personal philosophy, estimating that most information is noise and emphasizing objectivity, emotional control, fundamentals, and outcomes.
Core principles
- 01Most incoming information does not change the decision
- 02Emotion can convert noise into impulsive action
- 03Political identity should remain separate from investing
- 04Fundamentals and desired outcomes anchor judgment
- 05Uncertainty should be acknowledged rather than filled with conviction
How to run it
- 1
Define the decision
Write down what is actually being decided, the relevant time horizon, and the evidence that would justify a change.
Pro tip Specify what would make you reverse your current view before reading more news.
Watch out An undefined decision invites endless reactions to unrelated information.
- 2
Classify incoming information
Separate verified facts from forecasts, opinions, repetition, and emotional framing. Identify what is genuinely new.
Pro tip Ask whether the information changes cash flows, risk, valuation, or constraints.
Watch out High repetition can make an immaterial claim feel important.
- 3
Remove emotional contamination
Check for fear, euphoria, political preference, and attachment to a company, manager, or prior prediction. Reframe the issue in neutral language.
Pro tip Imagine evaluating the same facts under an opposing political administration.
Watch out Emotions often disguise themselves as confident analysis.
- 4
Return to fundamentals
Compare the material evidence with economic conditions, portfolio construction, and the outcomes the investment is meant to deliver.
Pro tip Use a written thesis or outcome statement as the reference point.
Watch out Price movement alone does not necessarily change intrinsic fundamentals.
- 5
Act only on material change
Maintain the existing course unless evidence changes the underlying case or required outcome. Record the reason when action is warranted.
Pro tip A no-action decision should be as deliberate as a trade.
Watch out Filtering noise must not become an excuse to ignore disconfirming evidence.
In the wild
After Liberation Day, markets fell amid tariff concerns. Minaya looked beyond the immediate alarm to policy incentives, market fundamentals, and the costs of remaining risk-off through cycles. Rather than treating the headline as a complete investment thesis, he evaluated whether the underlying case for risk assets had materially changed.
→ The decision remained anchored to fundamentals and long-term portfolio outcomes rather than the initial market reaction.
An investor strongly dislikes the current government and feels compelled to sell equities after a contentious announcement. Applying the filter, the investor separates that reaction from verified economic effects, checks earnings and portfolio objectives, and acts only if the policy materially changes the investment case.
→ Political emotion does not become an unexamined market-timing decision.
Common mistakes
Treating repetition as evidence
A claim heard many times can still be immaterial to fundamentals or already reflected in market prices.
Investing through political identity
Political agreement or anger can distort estimates of economic impact and expected return.
Falling in love with the thesis
Attachment to a company, stock, or management team makes disconfirming evidence easier to dismiss.
Is it for you?
Best for
It is best for investors and decision-makers operating amid volatile markets, political conflict, or constant commentary.
Not ideal for
It is not ideal for roles where rapid reaction to genuinely time-sensitive operational information is the primary objective.
From the transcript
“eighty percent of what you hear is just.”
“take the emotion out, don't let the noise suck you in”
“it's about the fundamentals.”
From the episode
BNY's Jose Minaya on How AI Is Transforming Asset Management
Jose Minaya