Investment Signal
Does structural lock-in predict equity performance? We test whether BHI scores correlate with stock returns, operating margins, and revenue growth across 141 publicly-traded platforms.
How the investment signal moved across the quarter on a stable 141-platform public universe. The Q4−Q1 return spread narrowed to +3.4pp (from +17.6pp) as a broad market drawdown compressed trailing-12-month returns across the board. The operating-margin premium held: top-quartile-B platforms still out-earn the bottom quartile by +19.8pp — the more durable structural signal when price returns turn negative.
| Metric | Q2 2026 | Q3 2026 | Δ |
|---|---|---|---|
| Universe (public) | 141 | 141 | +0 |
| Q4 − Q1 spread | +17.6% | +3.4% | -14.2pp |
| Spearman ρ (B vs return) | 0.137 | 0.063 | -0.074 |
| B vs op-margin ρ | 0.293 | 0.293 | -0.000 |
| BHI platforms total | 184 | 184 | — |
| Score changes | 10 | 34 | +24 |
Note: the return spread compressed this quarter because trailing-12-month equity returns turned negative market-wide (top-quartile-B annualized -10.6%, universe -9.4%) — a market-beta effect, not a breakdown of the lock-in thesis. The B-vs-operating-margin correlation (ρ = 0.293) remains the strongest cross-sectional signal: structural lock-in shows up in fundamentals even when price returns are risk-off.
B-Index vs 1-year stock return
Positive slope but heavy noise. The fit is dominated by a small number of high-B, high-return franchises.
B-Index vs operating margin
Platforms in the upper BHI zones earn structurally higher operating margins — the financial expression of structural lock-in.
Parameter attribution to the Q4 − Q1 spread
Each bar is the parameter's Q4−Q1 delta. Coloured dots indicate the parameter family.
Cumulative return, indexed to 1.00
Six months, equal-weighted, no transaction costs. Q4 is top BHI quartile, Q1 is bottom.
Top quartile · current basket
| # | Platform | Zone | B-Index | 1Y Return |
|---|---|---|---|---|
| 01 | TSMC | Black Hole | 12.28 | +89.5% |
| 02 | FAA NextGen | Black Hole | 12.20 | -0.1% |
| 03 | National Grid UK | Black Hole | 11.27 | +20.1% |
| 04 | Palantir | Black Hole | 9.90 | -7.1% |
| 05 | ASML | Black Hole | 9.62 | +125.4% |
| 06 | Reliance Jio | Black Hole | 9.18 | -15.4% |
| 07 | Visa | Black Hole | 8.82 | +1.5% |
| 08 | China Mobile | Black Hole | 8.64 | -10.8% |
| 09 | Amazon | Black Hole | 8.40 | +8.6% |
| 10 | Kakao | Black Hole | 8.32 | -40.9% |
| 11 | NVIDIA (CUDA) | Black Hole | 8.29 | +23.1% |
| 12 | Mastercard | Black Hole | 8.14 | -4.5% |
| 13 | Amazon Marketplace | Black Hole | 7.77 | +8.6% |
| 14 | ICE | Black Hole | 7.40 | -27.4% |
Integrate BHI into your research workflow
Public API (REST/JSON) for programmatic access to all scores, decompositions, and quarterly updates. Commercial redistribution licensed at institutional tier.
Caveats
- Cross-section, not time series. Single BHI release. Causal inference requires longitudinal data.
- Confounds. High-BHI firms are disproportionately large-cap and tech-sector.
- Return correlation is weak. ρ = 0.18 is statistically weak. Margin correlation (ρ = 0.32) is stronger.
- Single scorer. Inter-rater reliability validation pending.
- Not investment advice. BHI is a structural-fact instrument.
Stock returns: Yahoo Finance API, TTM through July 5, 2026. Fundamentals: SEC filings (10-K, 10-Q). BHI scores: V3.1 model, 141 platforms. All data CC-BY 4.0 at github.com/Joingithubstyle/blackholeindex.