This simple checklist was produced by inverting Warren Buffett’s classic article on GEICO.
What mental or written checklist can we imagine Buffett used to think about GEICO and write the article?
- Relative performance of industry (Is Mr. Market presenting an opportunity?)
- Recent performance of industry
- Nature of the industry
- Advantages
- Disadvantages
- History (brief) of the company
- Advantages of the company
- Growth – track record
- Growth – future prospects
- market opportunity
- competitive advantages
- Relative performance vs. industry peers
- Capital structure
- use of cash
- shares outstanding
- Management
- board
- senior executives
- stock ownership
- Normalized earning power
- Valuation