The most-stable-language quintile earns 93.2 bps/month (t=9.16). We tried to break it three ways — factor adjustment, removing the normalization, and the Lazy Prices benchmark. It held.
Chevron's FY2025 10-K flagged at 1.4× the distress ceiling — its risk-factors section quintupled after the $53B Hess acquisition closed. A clean structural false positive: a merger, not a meltdown. The stock is near all-time highs.
The backtest across 7069 flag events. How the signal is constructed, what it predicted, and where it missed.
SVB, Bed Bath & Beyond, Rite Aid — plus Party City, a documented miss. What the filings said, why the scores were what they were, and what happened next.
The filing date was February 24. The FDIC arrived March 10. What happened in between, and what that window means.
Determinism, cross-sectional comparison, no context window — five reasons the tool most people reach for was the wrong one here.