Analyst's Diary: An investing checklist

In the book, 'Poor Charlie's Almanack,' Peter Kaufman outlines the investing checklist of legendary investor Charlie Munger. Munger, a big proponent of checklists, argues that each of the following principles must be considered part of the larger investment analysis process. That is, these principles should not be viewed in isolation. We have extracted the checklist from the book to help you increase your odds of success. Let's put it to good use! Risk All investment evaluations should begin by measuring risk, especially reputational. Incorporate an appropriate margin of safety Avoid dealing with people of questionable character Insist upon proper compensation for risk assumed Always beware of inflation and interest rate exposures Avoid big mistakes; shun permanent capital loss Independence "Only in fairy tales are emperors told they are naked." Objectivity and rationality require independence of thought Remember that just because other people agree or disagree with you doesn't make you right or wrong - the only thing that m