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    • Jul 26, 2021
    • 3 min read

Investing Checklist for Stocks and Businesses

Creating, adding, and using a checklist for investing in public and private businesses is a great way to remember more of what you have previously learned, identify great investments, avoid mistakes, and help decide how to allocate investments.


Investing Checklist for Stocks and Businesses. Creating, adding, and using a checklist for investing in public and private businesses is a great way to remember more of what you have previously learned, identify great investments, avoid mistakes, and help decide how to allocate investments.

Why Use a Checklist

I use a checklist to keep track of important investing criteria for analyzing public and private businesses (discussed in this video as well). As I read, listen, or watch other investors, I record their lessons and ideas in this checklist. I have been adding to this list for quite some time.

“How can smart people so often be wrong? They don’t do what I’m telling you to do: use a checklist to be sure you get all the main models and use them together in a multi modular way.” - Charlie Munger, Berkshire Hathaway

This checklist has helped with:

  • Remembering and Retaining Important Investment Ideas

  • Avoiding Mistakes

  • Identifying Great Companies

  • Deciding How to Allocate Investments

  • and more

Includes Nearly 100 Checklist Items :

  • Rational Capital Allocation, CEO / Management Effectiveness and Incentives x 17

  • Characteristics of Growth x 5

  • Advantages of Scale x 4

  • Characteristics for Long Runway x 10

  • Other Great Business Qualities x 10

  • Mental Models x 19

  • Psychology of Human Misjudgment (Charlie Munger) x 25

  • Things to Avoid x 2

Checklist items are a collection from shareholder letters, partnership letters, podcast interviews, YouTube speeches, YouTube interviews, letters, and more from: Carl Icahn, Peter Lynch, Mohnish Pabrai, Warren Buffett, Charlie Munger Li Lu, Seth Karman, Robert Wilson, Joel Greenblatt, Ben Graham, Phil Fisher and more.


List of books read: www.swany407.com/books


Remembering and Retaining

Without writing down all the important ideas I have came across over the years, it is very unlikely that I would be able to remember and use that information in the future. It is easy to forget small bits of information you read years ago, unless you write down, and use it frequently. In addition, I have found keeping the information in a checklist makes it easier to use the information, compared to searching across many pages in something like OneNote.


Avoiding Mistakes

Without this checklist, I would forget specific and nuanced ideas that I have learned in the past, and would have a higher chance of making the mistakes that I could have easily avoided.


In addition, going line by line helps slow down the investing decision making process, and increase the odds of making more rational decisions, rather than making one based on emotions or other external factors.


Identifying Great Companies

Or inverted, without the checklist, I would miss great opportunities that checked many of the boxes of successful traits noticed by other investors.



Deciding How To Allocate

This spreadsheet and checklist has also served as a tool to figure out opportunity cost. The score created is one component of my overall assessment of the company. I use that total score and compare to other companies to decide not only what to invest in, but also how much to invest.


Total Score =

Business Economics (high CROIC, etc.)

x Intrinsic Value / Price

x Business and Management Qualities (using this spreadsheet).


You can also simply use the business and management quality score as a way to compare companies and investment opportunities. Those with a higher score, may be a better overall company. However, I would caution, even if it is a better company, the price in relation to value may make it a lesser investment opportunity.


Purchase and Download

If you are interested, this exact spreadsheet analyzer is available to purchase and download here: Etsy (To promote more feedback, for the time being, use code "Swany407" to purchase the investing checklist for $40.70, compared to list price of $195.00)

Video

I discuss this and more in the following video.


Closing

If you enjoy these short write-ups, and are looking for more details, and in-depth thoughts and analysis, check out my Substack.


-Austin Swanson (Swany407)

Disclaimer: This content is intended for informational purposes. Before making any investment, you should do your own analysis. Please see the Disclaimer page for more details.


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