Defense First - AI Analysis Prompt
Use this Paul Tudor Jones rule prompt to apply “Defense First” to a specific company. It turns a vague opinion into a repeatable checklist: what facts you must verify, which assumptions matter most, what would invalidate the thesis, and the common misreads that create false certainty. Expect a written output you can save: a thesis summary, key risks, and next-step questions for filings and earnings calls. If a claim matters, require primary-source citations before you act. Educational only — not investment advice.
Full Prompt
You are an investment analyst trained in Paul Tudor Jones's principle of "Defense First." Your core philosophy: defense first, asymmetric bets, macro trading. Your task is to analyze {Company Name} through the specific lens of this principle.
## Context
Paul Tudor Jones teaches: "Dont focus on making money; focus on protecting what you have. Playing great defense means youll be around to play offense."
## Analysis Framework
### 1. Principle Application Assessment
- How does this principle specifically apply to {Company Name}?
- What aspects of the company are most relevant to "Defense First"?
- Rate the company's alignment with this principle: Strong / Moderate / Weak
- What would Paul Tudor Jones focus on first when evaluating this company?
### 2. Quantitative Evidence
- Identify 3-5 key financial metrics most relevant to this principle
- Analyze these metrics over the past 5-10 years for {Company Name}
- Compare with industry peers and historical benchmarks
- Are the numbers improving, stable, or deteriorating?
- What story do the numbers tell through the lens of "Defense First"?
### 3. Qualitative Deep Dive
- Evaluate the non-quantifiable factors Paul Tudor Jones would examine
- Management quality and alignment with this principle
- Industry dynamics and competitive position
- Business model sustainability viewed through this specific lens
- What would Paul Tudor Jones want to know that isn't in the financial statements?
### 4. Risk Assessment Through This Lens
- What risks does this principle specifically highlight for {Company Name}?
- What could go wrong that this principle is designed to protect against?
- Are there warning signs that Paul Tudor Jones would flag?
- Stress-test: How would this company perform under adverse conditions?
- What is the worst-case scenario from this principle's perspective?
### 5. Opportunity Identification
- What opportunities does analyzing through this lens reveal?
- Are there hidden strengths the market may be undervaluing?
- How does this company compare to Paul Tudor Jones's ideal investment?
- What catalysts could unlock value related to this principle?
### 6. Tudor Jones Verdict
- Summarize: Does {Company Name} pass the "Defense First" test?
- Rate the investment opportunity: 1-10 from this principle's perspective
- Clear recommendation: Buy / Hold / Avoid (based on this principle alone)
- What conditions would change your assessment?
- One-paragraph summary capturing Paul Tudor Jones's likely assessment
## Output Format
Present your analysis with specific data points in each section. Use Paul Tudor Jones's analytical style: risk-first macro analysis with asymmetric reward-to-risk positioning. End with a decisive verdict.Related reading (close the loop)
Pick one path below to turn the output into a checkable, repeatable decision policy.
- Read the matching principleDefinition, boundaries, pitfalls, and a minimal checklist.
- Master profileMethodology summary + common misreads for this framework.
- Practice in scenariosTranslate conclusions into “what I do under stress”.
- More prompts from this masterTriangulate with multiple rules instead of anchoring on one prompt.
Educational only. Verify facts with primary sources and apply your own constraints.
Basic Questions
How to execute the 'defense first' trading philosophy in practice?
Core idea: defense first — controlling losses is more important than chasing profits
✅ Using this AI prompt, you can systematically analyze any company or investment opportunity from this principle's perspective.
The prompt guides you to:
1. Assess whether the investment target meets this principle's core requirements
2. Identify key risks and blind spots
3. Provide a 1-10 comprehensive rating
Start by analyzing companies you know well for practice, then apply the framework to new investment decisions.
✅ Using this AI prompt, you can systematically analyze any company or investment opportunity from this principle's perspective.
The prompt guides you to:
1. Assess whether the investment target meets this principle's core requirements
2. Identify key risks and blind spots
3. Provide a 1-10 comprehensive rating
Start by analyzing companies you know well for practice, then apply the framework to new investment decisions.
Usage Tips
Is the AI's downside risk assessment reliable?
⚠️ AI risk assessment is a useful starting point but cannot replace strict risk management discipline.
Value:
- Systematically identifies overlooked risk factors (liquidity risk, correlation risk)
- Quantifies potential losses under different stop-loss strategies
- Builds a clear "worst-case scenario" framework
Limitations:
- Cannot predict sudden events (flash crashes, policy shocks)
- Historical backtesting doesn't guarantee future performance
- Jones's "intuition" and "market feel" cannot be replicated by AI
✅ Best approach: Use AI risk analysis as a "checklist" for your defense system, but set stop-loss discipline in advance and execute strictly.
Value:
- Systematically identifies overlooked risk factors (liquidity risk, correlation risk)
- Quantifies potential losses under different stop-loss strategies
- Builds a clear "worst-case scenario" framework
Limitations:
- Cannot predict sudden events (flash crashes, policy shocks)
- Historical backtesting doesn't guarantee future performance
- Jones's "intuition" and "market feel" cannot be replicated by AI
✅ Best approach: Use AI risk analysis as a "checklist" for your defense system, but set stop-loss discipline in advance and execute strictly.
Getting started
Does this prompt give investment advice or buy/sell calls?
No. It is a research helper that turns your thinking into checkable inputs and constraints: what evidence you must verify, what would prove the thesis wrong, and what common misreads to avoid. Treat the output as a draft, not a signal. Validate every material number against primary sources (filings, earnings releases, investor presentations, transcripts), and do not act unless you can write down (1) position-size limits and (2) explicit invalidation triggers.
What inputs should I provide for a reliable result?
At minimum: a 1-sentence business model summary, your current thesis (why it wins/loses), time horizon, and risk constraints; a valuation/price range; and the latest financial statements (profit quality, cash flow, debt/liquidity). Add context that reduces hallucinations: the exact filing period, known one-offs, key competitors, and what you do NOT know yet. If an input is missing, label it as missing evidence instead of letting the model guess.
Validation and boundaries
How do I validate the output?
Validate falsifiable claims one by one. Rewrite each key statement into something you can check: the metric, the period, and the source. Numbers must match filings; management claims must be traceable to transcripts/guidance; and “moat” claims need observable evidence (pricing power, retention, switching costs, cost structure). Anything you cannot verify becomes a follow-up task, not a decision trigger. If the model cites dates, confirm they are not beyond its knowledge cutoff.
When should I NOT act on the output?
If you cannot write down invalidation triggers, a position-size cap, or primary-source evidence for the key claims behind “Defense First”, do not act. The safer move is usually to reduce size, slow down, and schedule the next review.
More Rule Prompts
Explore other investment principles from this master.
Control Your Emotions
Every day I assume every position I have is wrong. This removes the ego from trading. Never fall in love with a position.
→Timing Matters
Being right about direction is not enough; you must be right about timing. A great idea at the wrong time is a losing trade.
→Price Action is Truth
At the end of the day, the market tells you whether youre right or wrong. Listen to price action, not your thesis.
→Asymmetric Bets
Look for trades where the upside is many times the downside. 5:1 reward-to-risk ratios mean you can be wrong most of the time and still profit.
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