1. IDEA SOURCING AND SELECTION
What are the unit economics in the industry?
What are the key variables that determine success?
What is the most likely path that the industry will take in the next five years?
Why does the business exist?
Does it have a competitive advantage?
What is driving its return on invested capital?
Where will its growth come from?
What is the range and probability of outcomes for free cash flow per share in five years time?
What is a fair multiple of free cash flow for the business in five years, given its return on incremental invested capital and growth runway?
Is there a significant discount to intrinsic value?
Do they think like owners?
Are they savvy and opportunistic capital allocators?
Are their incentives aligned with ours?
Fair value reassessment