Focused Compounding

Ep 57. Our Real Life Investing Checklist

August 15, 2018
22 min

Checklist
 
Read most recent 10k and take notes
 
find 5 peers
 
Get longest term stock chart possible, record the number of years and use money chimp CAGR calculator to get the long-term return. We’re doing this because we want to make sure the stock works geometrically overtime
 
Get longest term stock chart possible for the closest peers and repeat step one. Often, we won’t have the longest chart for a company because of spinoffs. Compare these CAGR’s to the overall market. We want to see if these could work geometrically relative to the market
 
Calculate EV/Sales, EV- EBITDA, Debt-EBITDA, and CAGR, do min, max, median, mean, SD, CV for all of them
 
Do a Credit Check, Net Debt-EBITDA, Consecutive years with a profit, EBIT Margin and CV on Margin, Check Z-score and F-score 
 
If the company has a history, get a history of the past financials from EDGAR or OTC markets under disclosures, or from the co’s IR. from past 10k’s for the longest term possible, always want Sales and EBIT for the company we’re studying. Get the longest-term EBIT margin. Take min, max, median, mean, SD, CV (anything under 30% CV is low and good) the lower the better. Calculate sales CAGR and EBIT CAGR – 3 yr, 5 yr, 10 yr, 15 yr, 20 yr if exists and 25 if it exists (want to see if it has slowed down a lot over time)
  
Check VIC and read the writeups
 
Use Google to find write-ups/blog posts on the stock and read them
 
Try finding historical returns of the asset if it’s like Timber, $MLP, etc
 
Try finding past acquisitions­ in the industry 
 
Try coming up with an appraisal
 
 
Join our free memo distribution list at - www.focusedcompounding.com
 
Thanks for listening, and be sure to sign up using the promo code **Podcast** to get $10 off your monthly subscription price forever.
 
Contact Andrew at: 
Twitter: @Focusedcompound
Email:  info@focusedcompounding.com
 
Contact Geoff at:
Twitter: @GeoffGannon
Email:  gannononinvesting@gmail.com

Feedback on the new Podbay?
    1x
    15
    15
    00:00:00
      00:00:00