Our Scoring Philosophy
We believe investors deserve transparency. Not black boxes. Here's exactly how SimpliInvest generates risk scores.
Data Collection (4 Sources)
For every analysis, our AI pulls data from four categories:
1. Financial Fundamentals
- Market cap, P/E ratio, revenue growth, debt-to-equity
- Share structure: outstanding shares, float, short interest
- Corporate actions: reverse splits, dilution history, dividend changes
- Source: Yahoo Finance API
2. Leadership Background
- CEO and key executive names, titles, tenure
- Past companies and their outcomes (did they succeed or fail?)
- Lawsuits, SEC actions, regulatory issues tied to individuals
- Source: Web search + SEC EDGAR
3. News & Sentiment
- Recent news articles (last 30 days)
- Reddit discussion sentiment (bullish vs bearish, volume of mentions)
- Social media buzz and trending status
- Source: News APIs + Reddit search
4. Regulatory & Compliance
- SEC filings and any flags (going concern, auditor changes)
- Regulatory actions or investigations
- Industry-specific compliance issues
- Source: SEC EDGAR + web search
The AI Analysis
All four data sources are fed to Claude AI (by Anthropic) with a structured prompt. The AI:
- Evaluates 4-8 risk factors specific to the asset (not a fixed template — the AI determines which factors are most relevant)
- Scores each factor 0-10 (0 = safe, 10 = extreme risk)
- Generates a narrative explaining the risk in plain English with specific evidence
- Assigns a leadership risk rating if applicable (LOW / MODERATE / HIGH / CRITICAL)
- Produces an overall risk score (0-10)
What the Colors Mean
| Score | Color | Meaning |
|-------|-------|---------|
| 0.0 - 3.3 | GREEN | Low risk. Strong fundamentals, stable leadership, no major red flags |
| 3.4 - 6.6 | YELLOW | Moderate risk. Some concerns but also positives. Due diligence recommended |
| 6.7 - 10.0 | RED | High risk. Significant red flags identified. Proceed with extreme caution |
What We Don't Do
- We don't predict price movements. This is risk assessment, not price forecasting.
- We don't give buy/sell recommendations. We give you the information to make your own decision.
- We don't use proprietary "secret sauce." Our methodology is transparent because we believe you should understand how your tools work.
Caching & Freshness
Analyses are cached for 24 hours to balance freshness with API costs. Pro subscribers can request fresh analyses at any time.
*SimpliInvest is not a financial advisor. Our AI-generated analysis is for informational purposes only.*