// Credit rating scale (S&P convention).
// Bond.js converts letter ratings to these numbers; BondScorer uses them for gate checks.
// Investment grade = BBB (7) and above.
export const CREDIT_RATING_SCALE = {
  AAA: 10,
  AA: 9,
  A: 8,
  BBB: 7,
  BB: 6,
  B: 5,
  CCC: 4,
  CC: 3,
  C: 2,
  D: 1,
};

// ─────────────────────────────────────────────────────────────────────────────
// Fundamental baseline — Graham / value-investing style.
// MarketRegime.js overrides the valuation gates for INFLATED-mode analysis.
// Sector overrides are structural — they apply in both modes.
// ─────────────────────────────────────────────────────────────────────────────
export const ScoringRules = {
  STOCK: {
    gates: {
      maxDebtToEquity: 1.5, // Graham ceiling; 3.0 was too permissive — most distress starts above 2x
      minQuickRatio: 0.8, // Raised from 0.5: below 0.8 signals real liquidity stress in non-tech
      maxPERatio: 15, // Graham's actual rule: never pay more than 15x trailing earnings
      maxPegGate: 1.0, // PEG > 1.0 means you're paying full price for growth (Lynch standard)
    },
    weights: {
      margin: 2, // net profit margin
      opMargin: 2, // operating margin (pricing power)
      roe: 3, // return on equity — Buffett's primary quality metric
      peg: 2, // valuation relative to growth
      revenue: 2, // revenue growth
      fcf: 3, // raised: FCF is the most manipulation-resistant quality signal
    },
    thresholds: {
      marginHigh: 15, // lowered from 20: 15% net margin is genuinely excellent across most sectors
      marginMed: 8, // lowered from 10: 8% is the realistic mid-tier for industrials/retail
      opMarginHigh: 20,
      opMarginMed: 10,
      roeHigh: 15, // lowered from 20: sustainable 15% ROE is Buffett-quality; 20% is rare/fleeting
      roeMed: 10, // kept — 10% is the cost-of-equity floor for most businesses
      pegHigh: 0.75, // raised bar: PEG < 0.75 is genuinely cheap relative to growth
      pegMed: 1.0,
      revHigh: 10, // lowered from 15: 10% organic revenue growth is strong for mature cos
      revMed: 5,
      fcfHigh: 5,
      fcfMed: 2,
    },

    SECTOR_OVERRIDE: {
      // Large-cap tech borrows to fund buybacks — D/E 2.0 is structural, not distress.
      // AAPL quick ratio runs ~0.9 by design (aggressive working capital management).
      // Raised maxPERatio from 30→35: mega-cap tech comps (MSFT, GOOG) trade 28-35x sustainably.
      // Tightened maxPegGate from 2.0→1.5: paying >1.5x PEG for tech rarely ends well long-term.
      TECHNOLOGY: {
        gates: { maxDebtToEquity: 2.0, minQuickRatio: 0.8, maxPERatio: 35, maxPegGate: 1.5 },
        weights: { margin: 1, opMargin: 3, roe: 3, peg: 3, revenue: 4, fcf: 3 },
        thresholds: { marginHigh: 25, opMarginHigh: 25, roeHigh: 20, pegHigh: 1.0, revHigh: 20 },
      },

      // REITs: P/E and PEG are distorted by depreciation — score on yield and P/FFO.
      // Raised minYield from 4.0→4.5: 10Y yield at 4.5%+ means REITs must clear that bar to add value.
      // Tightened maxPFFO from 15→18: 15 was too tight; well-run REITs (O, VICI) trade 17-22x P/FFO.
      // Explicitly zero out weights that don't apply to REITs.
      REIT: {
        gates: { maxDebtToEquity: 6.0, minQuickRatio: 0.1, maxPERatio: 9999, maxPegGate: 9999 },
        weights: { margin: 0, opMargin: 0, roe: 0, peg: 0, revenue: 0, fcf: 0, yield: 5, pFFO: 3 },
        thresholds: { minYield: 4.5, maxPFFO: 20 },
      },

      // Banks: P/E and PEG are distorted by loan loss provisions.
      // Price-to-Book is the primary valuation metric.
      // Lowered maxPriceToBook from 2.0→1.5: P/B > 1.5 for banks outside crisis recovery is expensive.
      // Tightened ROE threshold: 12% is the realistic cost-of-equity for US banks; 10% is break-even.
      FINANCIAL: {
        gates: {
          maxDebtToEquity: 9999,
          minQuickRatio: 0.1,
          maxPERatio: 9999,
          maxPegGate: 9999,
          maxPriceToBook: 1.5,
        },
        weights: { margin: 0, opMargin: 0, peg: 0, roe: 5, revenue: 1, fcf: 1, priceToBook: 3 },
        thresholds: { roeHigh: 15, roeMed: 12, revHigh: 10, revMed: 5 },
      },

      // Energy: capital-heavy, cyclical. D/E up to 1.5 is normal.
      // FCF yield is the primary quality signal (replaces margin); opMargin matters for integrated cos.
      // Div yield is scored because energy majors return capital via dividends.
      ENERGY: {
        gates: { maxDebtToEquity: 1.5, minQuickRatio: 0.6, maxPERatio: 15, maxPegGate: 1.5 },
        weights: { margin: 0, opMargin: 3, roe: 2, peg: 1, revenue: 2, fcf: 4, yield: 3 },
        thresholds: {
          opMarginHigh: 20,
          opMarginMed: 10,
          roeHigh: 15,
          roeMed: 8,
          fcfHigh: 8,
          fcfMed: 4,
        },
      },

      // Healthcare: high R&D burn distorts net margin; focus on revenue growth and FCF.
      // P/E can be elevated for pipeline names — gate loosened slightly.
      HEALTHCARE: {
        gates: { maxDebtToEquity: 1.5, minQuickRatio: 1.0, maxPERatio: 25, maxPegGate: 1.5 },
        weights: { margin: 1, opMargin: 2, roe: 2, peg: 2, revenue: 4, fcf: 3 },
        thresholds: {
          marginHigh: 20,
          marginMed: 10,
          roeHigh: 20,
          roeMed: 12,
          revHigh: 15,
          revMed: 8,
          fcfHigh: 8,
          fcfMed: 3,
        },
      },

      // Communication Services: META, GOOGL, NFLX, DIS, T, VZ.
      // Mix of high-margin platform businesses and capital-heavy telcos/media.
      // P/E gate at 25: META and GOOGL sustainably trade 20-25x; below 15 is wrong for platforms.
      // High FCF weight: platform businesses are judged on FCF (ad revenue converts 35-40% to FCF).
      // Revenue growth matters more than for mature industrials — network effects are the moat.
      COMMUNICATION: {
        gates: { maxDebtToEquity: 2.0, minQuickRatio: 0.8, maxPERatio: 25, maxPegGate: 1.5 },
        weights: { margin: 2, opMargin: 3, roe: 2, peg: 2, revenue: 3, fcf: 4 },
        thresholds: {
          marginHigh: 25,
          marginMed: 12,
          opMarginHigh: 30,
          opMarginMed: 15,
          roeHigh: 20,
          roeMed: 12,
          pegHigh: 1.0,
          pegMed: 1.5,
          revHigh: 15,
          revMed: 5,
          fcfHigh: 8,
          fcfMed: 3,
        },
      },

      // Consumer Staples: KO, PG, WMT, COST, KR. Slow-growth, recession-resistant.
      // Lower revenue growth expectations (2-5% is good for staples).
      // Higher margin thresholds — pricing power is the primary moat (not growth).
      // D/E tolerance is low — staples should be conservatively financed.
      CONSUMER_STAPLES: {
        gates: { maxDebtToEquity: 1.5, minQuickRatio: 0.5, maxPERatio: 22, maxPegGate: 2.0 },
        weights: { margin: 3, opMargin: 3, roe: 3, peg: 1, revenue: 1, fcf: 3 },
        thresholds: {
          marginHigh: 12,
          marginMed: 7,
          opMarginHigh: 18,
          opMarginMed: 10,
          roeHigh: 20,
          roeMed: 12,
          pegHigh: 1.5,
          pegMed: 2.0,
          revHigh: 5,
          revMed: 2,
          fcfHigh: 5,
          fcfMed: 2,
        },
      },

      // Consumer Discretionary: AMZN, HD, MCD, NKE, TSLA. Cyclical, growth-oriented.
      // Revenue growth is the primary signal — discretionary spending expands with the economy.
      // Margins are thinner than staples (competitive markets); FCF matters for capital return.
      // P/E gate relaxed slightly — quality retailers trade at 20-30x on durable FCF.
      CONSUMER_DISCRETIONARY: {
        gates: { maxDebtToEquity: 2.0, minQuickRatio: 0.5, maxPERatio: 25, maxPegGate: 1.5 },
        weights: { margin: 2, opMargin: 2, roe: 2, peg: 2, revenue: 4, fcf: 3 },
        thresholds: {
          marginHigh: 10,
          marginMed: 5,
          opMarginHigh: 15,
          opMarginMed: 8,
          roeHigh: 20,
          roeMed: 12,
          pegHigh: 1.0,
          pegMed: 1.5,
          revHigh: 12,
          revMed: 5,
          fcfHigh: 5,
          fcfMed: 2,
        },
      },
    },
  },

  ETF: {
    // Raised expense gate from 0.5→0.2: with so many sub-0.1% index ETFs available,
    // a 0.5% expense ratio is genuinely hard to justify except for niche/active strategies.
    gates: { maxExpenseRatio: 0.2 },
    weights: { yield: 2, lowCost: 4, fiveYearReturn: 2 }, // cost is #1 predictive factor; 5Y return rewards consistency
    thresholds: {
      minYield: 1.5,
      maxExpense: 0.05, // 0.05% is achievable for broad market ETFs
      minVolume: 1000000, // 1M ADV is the real liquidity floor to avoid slippage
      minFiveYearReturn: 8.0, // S&P 500 long-run real return ~7-10%; 8% filters underperformers
    },
  },

  BOND: {
    // Kept investment-grade floor at BBB — still correct. Below BBB is speculative.
    // Raised minSpread from 1.0→1.5: with risk-free at 4.5%, you need >1.5% spread
    //   to be compensated for credit risk vs just buying Treasuries.
    // Tightened maxDuration from 10→7: in a HIGH rate regime, duration > 7 carries
    //   meaningful rate-sensitivity risk (every 1% rate rise ≈ 7% price loss).
    gates: { minCreditRating: 7 }, // BBB = investment-grade floor
    weights: { yieldSpread: 3, duration: 2 },
    thresholds: { minSpread: 1.5, maxDuration: 7 },
  },
};