turnaround_story_validation_skill

Turnaround Story Validation Skill

Data dependencies and execution prerequisites

It is recommended to use Wind wind-mcp-skill to obtain underlying data. Before execution, first check whether there is already locally wind-mcp-skill; if not, prompt the user to install:

# GitHub
npx skills add Wind-Information-Co-Ltd/wind-skills --skill wind-mcp-skill -g -y

# Gitee 镜像（国内）
npx skills add https://gitee.com/wind_info/wind-skills.git --skill wind-mcp-skill -g -y

Skill positioning

This skill is used to judge whether a "distressed reversal stock" is truly moving toward real repair, or merely telling a nice-sounding story with insufficient evidence. The output focus is to break the reversal path apart, verify whether improvement has already occurred, whether it is sustainable, where the failure boundary lies, and whether the current odds are sufficient to cover the risk.

Execution process

Step 1: Clarify the reversal thesis

First make clear which kind of reversal the market is betting on:

• Operating repair
• Profit repair
• Balance sheet repair
• Industry prosperity reversal
• Governance and management repair

If even the target of reversal cannot be stated clearly, it indicates that this is more like sentiment trading rather than a researchable thesis.

Step 2: Review why the company fell into distress

A reversal judgment must first understand "why it got worse before." It is necessary to clarify:

• What is the root cause of performance deterioration
• Whether the problem is caused by the external cycle, internal operations, or capital structure
• Whether the distress is a short-term shock or structural damage
• What was the most critical variable in the historical decline

Only by understanding the old problems can one judge whether the new improvements truly address the root cause.

Step 3: Check whether improvement evidence has appeared

Around the reversal thesis, look for objective changes that have already appeared, such as:

• Orders, revenue, profit margins, and cash flow begin to repair
• The core business or customer structure improves
• Asset disposal, financing, and debt repayment pressure ease
• Management replacement, governance improvement, and operating discipline repair

This stage emphasizes "evidence that has already occurred," rather than vague narratives that "things may get better in the future."

Step 4: Assess the repair path and time window

Even if improvement has already appeared, it is still necessary to judge:

• Whether the improvement is a phased rebound or the starting point of long-term repair
• How long it will take to materialize at the financial and valuation levels
• Which link is most likely to get stuck in the process
• Whether the company still has enough time and resources to complete the repair

The time window is especially important; many reversal theses fail because "the direction is right, but there is not enough time."

Step 5: Build success and failure scenarios

Build at least two scenarios:

• If the reversal succeeds, how the core variables improve and where the stock price elasticity comes from
• If the reversal fails, what variable first breaks the thesis and where the loss boundary lies

This step converts the "story" into "odds and risk."

Step 6: Form verification conclusions and action conditions

Finally answer clearly:

• Is this a reversal supported by existing evidence, or is it still at the narrative level
• If tracking is to continue, what is the most important milestone
• If avoidance is desired, what is the most critical disconfirming reason

Output structure

---

{Stock Name} Reversal Logic Verification ({YYYY-MM-DD})

I. Conclusion summary

• Current Assessment: {Genuine reversal signs have appeared / Still largely story-driven / Cannot be determined yet}
• Most Critical Evidence of Improvement: {one sentence}
• Maximum Failure Boundary: {one sentence}

II. Review of Sources of the Predicament

• {Cause of predicament 1}
• {Cause of predicament 2}
• {Core impaired variable}

III. Current Evidence of Improvement

Dimension	Evidence	Assessment
Operational Repair	{Description}	{Strong/Medium/Weak}
Financial Repair	{Description}	{Strong/Medium/Weak}
Governance Repair	{Description}	{Strong/Medium/Weak}

IV. Repair Path and Time Window

• Repair Path: {Brief description}
• Key Milestones: {Brief description}
• Time Constraints: {Brief description}

V. Success/Failure Scenarios

Success Scenario

• {Scenario key points}

Failure Scenario

• {Scenario key points}

VI. Final Recommendation

• Suitable Status: {Focus tracking / Wait for more verification / Temporarily avoid}
• Variables That Must Be Verified Next: {variable}

---

Quality Requirements

1. The reversal conclusion must be based on "evidence that the old problems have been resolved," not mere imagination.
2. Distinguish short-term rebounds from structural repairs, and avoid mistaking a phased recovery for a trend reversal.
3. The time window and resource constraints must be clearly stated; many reversal theses fail because of the duration of execution.
4. Both success and failure scenarios must be tied to specific variables, without vague narrative descriptions.
5. If the evidence is insufficient, say directly that "the story outweighs the facts" and do not force beautification.