Warren Buffett probably is the best investor in the world.
Here's his checklist to invest successfully 👇🏼
Here's his checklist to invest successfully 👇🏼
Warren Buffett divides his checklist in 3 parts:
▪️ The business
▪️ Management
▪️ Financials
Let's dig into each one.
▪️ The business
▪️ Management
▪️ Financials
Let's dig into each one.
1️⃣ The business
▪️ Is the business understandable?
▪️ Do you understand how the company makes money?
▪️ Has the business a consistent operating history?
▪️ Is there a big moat around the company?
▪️ Is the business understandable?
▪️ Do you understand how the company makes money?
▪️ Has the business a consistent operating history?
▪️ Is there a big moat around the company?
▪️ Is it a business that even a fool could make money in?
▪️ Is the company very capital light?
▪️ Does the company have pricing power?
▪️ Have you read the annual reports of its main competitors?
▪️ Is the company very capital light?
▪️ Does the company have pricing power?
▪️ Have you read the annual reports of its main competitors?
2️⃣ Management
▪️ Has management demonstrated a high degree of integrity?
▪️ Has management demonstrated a high degree of intelligence?
▪️ Has management demonstrated a high degree of energy?
▪️ Is management rational?
▪️ Is management candid with shareholders?
▪️ Has management demonstrated a high degree of integrity?
▪️ Has management demonstrated a high degree of intelligence?
▪️ Has management demonstrated a high degree of energy?
▪️ Is management rational?
▪️ Is management candid with shareholders?
▪️ Has management resisted the temptation to grow quickly via M&A?
▪️ Has management the strength not to follow Wall Street?
▪️ Did the company execute a large merger recently?
▪️ Are there a lot of stock-based compensations?
▪️ Are stock options treated as an expense?
▪️ Has management the strength not to follow Wall Street?
▪️ Did the company execute a large merger recently?
▪️ Are there a lot of stock-based compensations?
▪️ Are stock options treated as an expense?
3️⃣ Financials
▪️ Is the Return On Equity high and consistent?
▪️ Is the company conservatively financed?
▪️ Has the company a strong track record in earnings growth?
▪️ Are the profit margins attractive?
▪️ Has the company created a lot of shareholder value in the past?
▪️ Is the Return On Equity high and consistent?
▪️ Is the company conservatively financed?
▪️ Has the company a strong track record in earnings growth?
▪️ Are the profit margins attractive?
▪️ Has the company created a lot of shareholder value in the past?
Here you can find an overview of all criteria mentioned:
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Start your journey here:
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▪️ Each Tuesday we share 5 investment insights
▪️ Each Thursday we publish a deeper investment article
Start your journey here:
qualitycompounding.substack.com
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