Tool: The Bad Business Checklist (Use This Before You Buy a Stock)
Your Free Tool for Evaluating Potential Stocks for a Profitable Portfolio
"The Bad Business Checklist" is a tool I created based on the wisdom of Charlie Munger and Warren Buffett. I spoke about it during my conversation with Clay Fink on The Investors Podcast Network (video below).
This checklist has proven highly effective, conserving my research time and preventing poor investment decisions by quickly highlighting businesses unlikely to be beneficial for my portfolio.
About the Bad Business Checklist
To construct the checklist, I analyzed Berkshire Hathaway annual meeting transcripts from 1994 through 2021. Specifically, I found the quotes where Munger and Buffett discussed the characteristics of good businesses. This resulted in a list of desirable traits, each of which was noted in a comprehensive spreadsheet.
From these traits, I developed a second column in the spreadsheet, consisting of their respective opposites. The compilation of these opposing traits resulted in "The Bad Business Checklist", an investment tool to help identify potential business pitfalls.
I hope you will find it as valuable as I have.
Sincerely,
Chris Franco
P.S. Please subscribe to the CMQ YouTube channel if you haven’t already.
P.S.S. Here is the interview where I discuss the checklist. The timestamp is 15:05. The video should begin at that point, based on how I embedded it.