Investing Checklists will Save Your Portfolio

Investing Checklists Will Save You Time and Money

A checklist saves lives.

Before a planes takes off, the pilot must always go through a checklist to ensure that everything is rigorously checked.

And you certainly don’t want a nightmare crash in your portfolio.

I’ve had my checklist for about 2 years now and I felt it was time to go through it and improve upon it.

For long time readers and intrinsic value calculator users, you would have seen my initial checklist.

It went a little something like this.

Initial OSV Investing Checklist

There were two sections to the checklist. Qualitative and Quantitative.

1. Quantitative

Investing Checklists

Investing Checklists

2. Qualitative

By the end of these questions, I will have an idea of what number to give to categories in the spider graph such as below.

Problems with the Above Investing Checklist

1. Limited set of numbers and metrics

On the qualitative side, there isn’t much to explain. The criteria and cutoff points look pretty good. That’s only if you’re looking for the same type of company for every investment.

E.g. The cases couldn’t identify that a company with low margins with high inventory turnover could be even more effective than a high margin, low turnover company.

2. Too Narrow/Focused

By having setting specific standards, it was easy to forget other aspects like looking up CEO compensation, shares outstanding history etc.

3. Wording

The wording of the case also made it difficult because it just requires a yes or no. It made it far to easy to just answer based on my own guesses without performing the due research.

4. Not Universal

I found that the checklist was pretty lame against a company like KO or JNJ. I ended up skipping the entire checklist.

Checklist Improvement

So the question is, how do I improve on this investing checklists?

Here is the new updated and improved investment checklist that covers a core set of to do tasks with a final evaluation checklist.

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7 responses to “Investing Checklists will Save Your Portfolio”

  1. If I am not mistaken, a few items of your psychological checklist were derived from Charlie Munger’s speech on psychology of misjudgment.

  2. Great post, and I’m looking forward to your revised/updated effort. It will be helpful to me in updating the checklist I currently use, which is here if your interested:


  3. Jae Jun says:

    @ Half Ben Half Phil,
    Yes the qualitative section is from Charlie Munger. He is a master in behavioral finance.

    @ Jeff,
    Nice checklist you have there. Simple and straight to the point.
    My one is becoming more complicated. Seems like people are curious about my new checklist from the traffic that is coming in.
    Hope not to disappoint.

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