A Roffel Investments Framework for Converting Expected Value into Portfolio Allocation

This white paper formalizes the Capital Payoff Ratio (CAPR) and the loss-adverse portfolio allocation framework built around it. Expected Value converts thesis-defined outcomes into Potential Return (PR) and Potential Loss (PL). CAPR compares the normalized opening capital plus potential return with the independently modeled potential loss. The allocation architecture then converts these inputs into portfolio weights under explicit return and loss requirements. The framework distinguishes between investment judgment, expected value construction, payoff-quality measurement, and allocation execution. It introduces three allocation modes: a required-loss diagnostic, a constrained CAPR optimizer, and a loss-budget fallback. The paper also addresses inflation, cash as an economic asset, time normalization, leverage, optional constraints, governance rules, and limitations. This public version excludes implementation mechanics, solver controls, internal calibration rules, and operational procedures.