Warren Buffett’s Investing Checklist
From: www.linkedin.com (Brian Stoffel)
Warren Buffett’s Investing Checklist:
“No wise pilot, no matter how great his talent and experience, fails to use his checklist.” – Charlie Munger
🏢 BUSINESS TENETS
1: Is the business understandable?
2: Do you know how the money is made?
3: Does the business have a consistent operating history?
4: Does the company have favorable long-term prospects?
5: Is there a big moat around the business?
6: Is it a business that even a dummy could make money in?
7: Can current operations be maintained without too much reinvestment?
8: Is the company free to adjust prices to inflation?
9: Have you read the annual reports of the main competitors?
👨💼 MANAGEMENT TENETS
10: Has the management demonstrated a high degree of integrity?
11: Has the management demonstrated a high degree of intelligence?
12: Has the management demonstrated a high degree of energy?
13: Is management rational?
14: Is management candid with shareholders?
15: Has management resisted the temptation to grow quickly by merger?
16: Has management the strength not to follow the institutional imperatives?
17: Has the business been free of a major merger in the last 3 years?
18: Are stock options tied to management performance rather than the organization’s performance?
19: Are stock options treated as an expense?
💰 FINANCIAL TENETS
20: Is the return on equity adequate?
21: Is the company conservatively financed?
22: Has the company had a track record of earnings growth in most years above the stock market average?
23: Are the profit margins attractive?
24: Has the company created at least one dollar of market value for every dollar of earnings retained?
What would you add to Buffett’s excellent list?
