# FIN-3 — the OOS monitor's verdict vocabulary cannot say "computable but uninformative", so it printed OK the day the sample crossed 60 while live Sharpe was -1.33

status: open · raised 2026-09-10 (external financial review F4, confirmed — see `research/2026-09-09_financial_review_verification.md`) · class: loudness & calibration · judgement: **YES** · effort ~0.25 pd · horizon: **must land before the December gate**

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**Plain-language summary.** On 09-01 the monitor said INSUFFICIENT_DATA at 56
live returns. On 09-09 it said **OK** at 61. Nothing about the evidence
improved — live Sharpe moved from -1.70 to -1.33, both deeply negative. The
sample crossed an integer threshold and the label changed from an honest
statement of ignorance to a word that reads as reassurance. The monitor's own
design note says *"do not false-reassure."*

## Mechanism

`MIN_OOS_DAYS = 60`, with the comment *"below this the Sharpe CI is so wide the
test has no power; declaring OK or DEGRADED would be theatre."* The threshold
is right and the mechanism is defensible — OK means the live metric has not
fallen below the in-sample bootstrap CI lower bound, and at n=61 that bound is
+2.830, so almost nothing could breach it. But the project's own interpretation
memo (`research/2026-07-13_december_gate_interpretation_memo.md`) puts the power
at ~12% even at **126** days. At 61 it is far lower. The vocabulary
(OK / DEGRADED / INSUFFICIENT_DATA) has no way to say *"we can now compute a
number and that number is uninformative."*

**Qualification the review omitted, recorded so severity is not overstated:**
no machine reads this OK as a pass. `thales go-live-gate` evaluates a separate
criterion, `forward_sharpe_lower`, which FAILS (95% lower -5.456 < 0). The
false-reassurance risk is to a human skimming a verdict word.

## Fix shape (propose-only)

Either a fourth state (`UNDERPOWERED` / `COMPUTABLE_LOW_POWER`) that reports
the number with its power beside it, or raise `MIN_OOS_DAYS` to where the
interpretation memo says the test has power. The first is preferable: it keeps
the number visible instead of withholding it.

## The timing constraint is the point

Do this **before** December. A verdict-vocabulary change made while looking at
the gate's result is gate-shopping, however well intentioned. That is the whole
argument for doing it now rather than when it matters.

## Test design + negative control

A fixture at n just above the minimum with a wide CI must produce the new state,
not OK. **Negative control:** restore the three-state vocabulary and assert the
fixture goes back to OK.

## Kill criterion (pre-registered)

If adding a state would require touching the pinned DEGRADED criterion that the
retire-rule counts, the item drops to the `MIN_OOS_DAYS` change instead — the
retire criterion's wording is pinned and this row may not soften it.