95-year old Charles Munger of Berkshire Heathaway is a big fan of checklists in decision making.
Here is Munger’s Investment Checklist:
1.) Treat a share of stock as a proportional ownership of the business.
2.) Buy at a significant discount to intrinsic value to create a margin of safety.
3.) Make markets your servant rather than your master
4.) Be rational, objective and dispassionate.
Munger believes that it is “roughly right that the market is efficient.” Still, the stock market is not totally efficient and it’s this difference between “totally efficient” and “somewhat efficient” that offers opportunities for disciplined investors.
Sven Franssen