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Checklist For Investing Decisions

Short written checklist:

- Is this within my circle of competence?

- Is it a good business?

- Do I like management? (Operators, capital allocators, integrity)

- Is the stock incredibly cheap? Am I trembling with greed?

Actively seek out contrary opinions

- Ask "What would cause me to change my mind?"

Don't anchor on historical information/perceptions/stock prices

- Keep an open mind

- Update your initial estimate of intrinsic value

- Erase historical prices from your mind; don't fall into the "I missed it" trap

- Think in terms of enterprise value not stock price

- Set buy and sell targets

• Admit and learn from mistakes

- Learn the right lessons and don't obsess

- Put the initial investment thesis in writing so you can refer back to it

- Sell your mistakes and move on; you don't have to make it back the same way you lost it

- But be careful of panicking and selling at the bottom

• Don't get fooled by randomness

• Understand and profit from regression to the mean