Warren Buffett Investing Checklist

## Warren Buffett Investing Checklist

**Stock**: {COMPANY} ({TICKER})

Answer each with: ✓ Pass / ✗ Fail / ? Uncertain — then explain briefly.

**CIRCLE OF COMPETENCE**
[ ] Do you fully understand how this business makes money?
[ ] Can you explain in plain language why customers choose this company over rivals?
[ ] Would you be comfortable owning this for 10 years without checking the price?

**BUSINESS QUALITY**
[ ] Does the business have a durable competitive moat?
[ ] Has the business maintained ROIC > 15% over 10 years?
[ ] Is the business recession-resistant (Buffett preference: essential products)?
[ ] Are gross margins stable or expanding (>40% preferred for Buffett-style quality)?

**MANAGEMENT INTEGRITY**
[ ] Has management consistently acted in shareholders' (not their own) interests?
[ ] Is compensation reasonable relative to performance?
[ ] Does management give candid, non-promotional communication?
[ ] Have they ever repurchased shares when the stock was cheap (below intrinsic value)?

**FINANCIAL STRENGTH**
[ ] Is the business self-funding — generates more cash than it consumes?
[ ] Is debt conservatively used? (Buffett dislikes high leverage)
[ ] Is owner earnings (net income + D&A – maintenance capex) growing?

**PRICE (Margin of Safety)**
[ ] Is the current price below your estimate of intrinsic value?
[ ] Does it offer at least a 20–30% margin of safety?
[ ] Would Buffett describe this as a fair price for a wonderful business?

**SCORE**: ___ / 15 Pass
- 13–15 Pass: Strong Buy candidate
- 10–12: Watch at a lower price
- < 10: Does not meet Buffett criteria — look elsewhere