How to Read This Book

The Framework page shows you the map of the whole city — four volumes, Part 0 plus eighteen parts, 118 chapters, laid out so you can see how one part leads to the next. This page is the practical companion to that map. It answers the question a map alone cannot: given everything you actually want to do, what order should you walk these streets in?

Two Ways to Walk Through the Eighteen Parts

Think of arriving in Kathmandu for the first time. One traveller sets out to walk the whole city, street by street, starting from one edge and finishing at the other — nothing is skipped, and by the end every neighbourhood makes sense in relation to every other. A second traveller has one afternoon before an important meeting and asks a guide for the fastest route to Durbar Square, planning to explore the side streets afterward, once the essential trip is done. Both are sensible ways to see the same city. The Investor's Canon can be read either way.

How the Two Hemispheres and Chapter 65 Fit Together

The Framework page's second diagram splits the Canon Score into two hemispheres: a 40-point qualitative side that asks whether you can trust a company and actually trade its shares, and a 60-point quantitative side that reads the financial statements. Chapter 64 builds the generic version of that 100-point rubric — one that could, in principle, apply to any company anywhere. Chapter 65 then takes that same rubric and reshapes parts of it for four of Nepal's most distinctive listed sectors: banks and other financial institutions, hydropower companies, microfinance institutions, and insurance companies.

It helps to picture a school where every student sits the same 100-mark exam, worth the same seven subjects for everyone. But two of those subjects have a practical component, and what "practical" means depends on what the student is studying. A music student's practical is a solo performance; an art student's is a portfolio review. Both are still marked out of the same 20 points, and both still count toward the same 100-mark total — only the specific questions inside that one section change. That is exactly what Chapter 65 does to Chapter 64's rubric: a bank's Financial Strength dimension is graded using CAR (Capital Adequacy Ratio, a measure of how much of its own capital cushion a bank holds against its loans) and NPL (Non-Performing Loan ratio, the share of loans that have stopped being repaid on schedule), while a hydropower company's Growth Trajectory dimension is graded completely differently before and after its Commercial Operation Date — the day it starts generating and selling electricity under a Power Purchase Agreement (PPA), the contract that fixes the price a utility will pay for that electricity. The total ceiling never moves. Only the questions inside a few of the boxes change, sector by sector.

Where the Case Studies Fit

Part XVI (Chapters 83–93) is where the rubric meets real, worked numbers — a commercial bank, a hydropower plant, a microfinance institution, a manufacturing company, a rights issue, an IPO, a bank failure, the 2021 NEPSE mania, a hydropower overrun, an insurance company, and a hotel investment, each scored from raw filings to a final Canon Score. These chapters reward reading Parts XIII through XV first: without the rubric (Part XIII), the calibration and drift-monitoring ideas (Part XV), and an understanding of how the score gets tested against history (Chapter 79's backtesting mindset), a case study is just a story about a company rather than a demonstration of the method.

A Short FAQ

Do I need to read all 118 chapters before I make my first investment decision?

No. The Fast Path above — Part IV, then Part XIII — gives you a working version of the Canon Score in two parts' worth of reading. Treat the rest of the book as the reference library you return to as specific questions come up: a hydropower IPO you're evaluating, a rights issue you're deciding whether to subscribe to, a dividend policy you're trying to interpret.

What if the company I'm scoring doesn't fit any of Chapter 65's four sectors?

Use Chapter 64's generic rubric exactly as written. Chapter 65 only reshapes the rubric for sectors where NEPSE-listed companies behave distinctly enough to need it. Every other company — most trading houses, most services businesses — is scored on the same seven dimensions, at the same point weights, with no adjustment layer at all.

Where does Nepal's broader credit and liquidity cycle fit in, if the Canon Score is only about one company at a time?

Deliberately, nowhere in Chapters 64 or 65. The Canon Score measures one company's quality in isolation. Nepal's credit cycle — deposit growth against credit demand, treasury bill yields, Nepal Rastra Bank's (NRB, the country's central bank) policy stance — is handled one layer up, at the portfolio-allocation stage, in Chapter 59 (Asset Allocation Within Nepal's Investment Universe). A company's Canon Score does not rise or fall with the credit cycle; how much of your portfolio you hold in equities at all does.

My Canon Score gave me a number. What do I do with it now?

Read Chapter 66 before acting on any score. It explains that the score is a quality measure, not a valuation or timing signal, and that it works alongside — never instead of — the hard position-sizing and sector-exposure ceilings set elsewhere in the book. Chapter 96 (Rules for Overriding the Model) then covers the narrow, specific circumstances in which a documented company event, not a market mood, can justify departing from what the score says.

I noticed what looks like an inconsistency somewhere in the book. What should I do?

Chapter 85's own case study shows this happening productively inside the book itself: an analyst cross-checks a scoring detail against an earlier chapter, confirms it independently, and the finished chapter documents the process rather than hiding it. If you spot something that looks off, the site's footer link is the right place to reach out — new chapters and corrections are added as they're found.