The Investment Checklist: The Art of In-Depth Research

All too often, investors buy stocks based on either recommendations from other investors, hunches, or isolated facts about a business they’ve heard or read about. In doing this, your decision-making process becomes dangerous because you haven’t taken the time to thoroughly understand the businesses you are buying and you’re relying on the information, or misinformation, being provided to you about a particular stock. Instead, your investment purchases should be based on understanding the value of a business through in-depth research. If you truly understand the value of a business, then you will be in a position to recognize investment opportunities and can more easily make the right buy or sell decisions.

The Investment Checklist has been designed to help you develop an in-depth research process, through a series of checklists, that will allow you to effectively generate and research investment ideas, assess the quality of a business and its management team, and ultimately improve the performance of your portfolio. In it, author Michael Shearn–founder of Time Value of Money, LP, and the Compound Money Fund, LP–outlines the systematic process he has used over the past decade to carefully think through potential investments and avoid common investment mistakes. Along the way, he puts this approach in perspective by addressing:

• A search strategy that will improve your odds of finding investment ideas worth researching further

• The importance of evaluating a business’s strengths and weaknesses, measuring its operational and financial health, and understanding a business from the customers’ perspective rather than your own

• Why assessing the quality of management– from how they handle daily operations and long-term strategy to the type of managers they are and how they rose to lead the business–are essential to achieving better investment results

• How to gauge the potential future growth opportunities of a business by looking at whether it’s growing organically or through merger and acquisitions, and whether historical growth has been profitable

• And much more

Each chapter of The Investment Checklist also offers countless examples of companies the author has researched, considered investing in, and actually invested in or decided not to invest in. These examples show you exactly how his checklist helped him make investment decisions, and they’ll show you how to do the same. In addition, each chapter ends with “Key Points to Keep in Mind,” so you can zero in on the critical factors in each set of questions.

If you want to lower your investment risk you need to increase your knowledge of the businesses you buy stock in. The Investment Checklist will show you how to do this, and much more, by helping you follow a concise and easy-to-use framework that will guide your investment decisions.

Praise for THE INVESTMENT CHECKLIST

“Every wise investor will keep The Investment Checklist next to their financial instrument panel and consult it whenever they make a decision to buy or sell a stock.”
―Robert P. Miles, author, The Warren Buffett CEO

“Michael Shearn has written an indispensable book. It will raise the game of every investor who reads it. Fortunately, not all of them will.”
―Judd Kahn, co-author, Competition Demystified and Value Investing: From Graham to Buffett and Beyond

When you base your stock purchase decisions on isolated facts and don’t take the time to thoroughly understand the businesses you’re buying, costly investment mistakes are usually made. Instead, your investment purchases should be based on understanding the value of a business through in-depth research.

That’s why Michael Shearn―founder of Time Value of Money, LP and the Compound Money Fund, LP―has created The Investment Checklist. In it, he shares the successful approach he’s used over the past decade to generate and research investment ideas, assess the quality of a business and its management team, and ultimately improve his overall investment performance.

Along the way, you’ll be introduced to specific “checklists” that will enhance your ability to understand the dynamics of the business you’re interested in and the people operating it, value the potential investment, and make the most informed buy or sell decision possible. Each chapter also contains countless examples that show you exactly how the author’s checklist has helped him make the right investment moves over the course of his successful professional career.

Whether you’re just starting out and thinking about what you want to invest in, or already have a portfolio that you want to manage more effectively, The Investment Checklist has the tools and insights you need to improve your investment endeavors.