Investing checklists
Check a business against the questions long-term investors ask.
For learning only, not investment advice.
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VISA · NYSE
Tweedy and Graham. Net-net and asset-based cheapness. Score each item 1 to 5; tick any value-trap deal-breaker to disqualify.
Deal-breakers · Munger inversion
Tick any one and the score drops to zero. The position is disqualified outright.
Imminent Bankruptcy: Massive debt levels combined with an inability to service the interest.
Rapid Cash Burn: The company is destroying its net asset value month-over-month.
Fraud or Unreliable Books: You cannot trust the stated Book Value due to accounting irregularities.
No Catalyst + Terrible Capital Allocation: Management is destroying value and insiders are heavily selling.
1. Asset-based cheapness
Weight 35%Book Value Discount: Is the stock trading at a significant discount to its tangible book value?
Net-Net/Liquidation: Is it priced near or below its Net Current Asset Value (NCAV)?
Hidden Assets: Does the company hold valuable unrecorded assets (real estate, cash) not reflected in the stock price?
2. Earnings & yield
Weight 25%Earnings Discount: Is the stock trading at a historically low Price-to-Earnings (P/E) or EV/EBIT ratio?
High Yield: Does it offer a safe, abnormally high dividend yield relative to the broader market?
3. Market psychology & reversion
Weight 20%Price Collapse: Has the stock experienced a severe price decline due to temporary, fixable bad news?
Mean Reversion: Is the company operating in a cyclical industry currently sitting at the absolute bottom of its cycle?
4. Catalysts & alignment
Weight 20%Insider Buying: Are insiders (management/directors) aggressively buying shares on the open market?
Shareholder Yield: Is management actively shrinking the share count (buybacks) or liquidating non-core assets?