Basic investing checklist

Basic investing checklist

1)  Activate System 2 thinking ?  Have you read a company's latest annual report and latest quarterly reports and the annual reports of competitors?

2) How is the income, cash flow compared to debt. Is Debt < 3-4 times cash flow/income? Debt not more than 3-4 times normal income.

3) Debt/pensions and liabilities comparable to cash at hand ?

3) EV/FCF 9-10

4) No more than 7% of portfolio.

5)  Will the company be around in 20 years? Demographics (internet threat, more energy needs - profitable without subsidies. Baby boomers retiring, special living facilities, diagnostics and treatments.)
6) What is the short interest?

7) Is it good for the consumer or are there better substitutes ?

8) What is the ROIC/gross/net compared to competitors?

Checklist Manifesto notes

1 Accepting responsibility for the consequences of your actions
2  establishing a relationship with parents as an equal adult
3 being financially independent from parents
4 deciding on beliefs and values independently of parents and other influences

The cultivation of a willingness to defy or just plain old disappoint one's parents, that is the absolute precondition for intellectual and emotional freedom.

There are good checklists and bad, bad check list are vague and imprecise. They're too long they're hard to use; they are impractical. They turn people's brains off rather than on.
 good checklist on the other hand are precise. Theyre efficient, to the point and easy to use evenin difficyllt  situation.  they dont try to spell out everything instead they provide reminders of only the most critical and important steps.

When you're making a checklist, you must Define a clear pause point which the checklist is supposed to be used.

 you must decide whether you want or do-conFirm checklist or a do-read Checklist. with a do-confirm checklist he said team members perform their jobs from memory and experience, but then they stop. they pause to run the checklist and confirm that everything that was supposed to be done was done. with a read-do checklist on the other hand people carry out the tasks as they check them off it's more like a recipe.
 so for any new checklist you have to pick the type that makes the most sense for the situation. the checklist cannot be lengthy. A rule of thumb some use is to keep it between 5 and 9 items which is the limit of working memory.

You want to keep the list short by focusing on what he called the killer items - the steps that are the most dangerous to skip and sometimes overlooked.
the wording should be simple and exact and use the familiar language of the profession. Even the look of the checklist matters ideally it should fit on one page. It should be free of clutter and unnecessary colors.

Instead they chose to accept their fallibilities - The Simplicity and power of using a checklist. Indeed against the complexity of the wood we must - there is no other choice. When we look closely, we recognize the same balls being dropped over and over, even by those of great ability and determination. We know the patterns, we see the costs. Its Time to try something else. Try a Checklist