Value Investing

The Security I Like Best Checklist #Buffett #GEICO

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?

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  • 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

Berkshire Hathaway B shares Warren Buffett
By Mark Hirschey (Work of Mark Hirschey) [CC BY-SA 2.0], via Wikimedia Commons
Article by Greg Speicher