To learn more about the investment process in practice, please see Company Analysis.

1. IDEA SOURCING AND SELECTION
SEC filings
Personal network
Industry journals
2. INDUSTRY ANALYSIS
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?
3. BUSINESS ANALYSIS
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?
4. VALUATION
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?
5. INCENTIVES CHECK
Do they think like owners?
Are they savvy and opportunistic capital allocators?
Are their incentives aligned with ours?
6. DECISION
Pass
Watchlist
Portfolio
7. MONITOR
SEC filings
Management calls
Industry journals
Fair value reassessment