1. The Munger 4 (circle of competence, moat, management, price has margin of safety)
2. Is it a clone?
3. Is there real insider ownership?
4. Never lose money. What is the margin of safety and is this an asymmetric bet?
5. Is it a spawner?
6. Is it a cannibal?
7. Debt sucks. What’s the interest coverage and overall debt situation?
8. What is the destination analysis?
9. Would this be one of Buffett‘s dozen decisions that moved the needle at Berkshire Hathaway? Is it worthy of Munger money?
10. Where’s the water coming up to?
11. Does it pass the really test?
Also, don’t be dogmatic. If something like the Continental Resources merger workout is available, I can do it.
The previous checklist can be found here.