Sunday, 1 July 2012

Buffett/Munger Filters
1. Margin of Safety (P/E, Equity, Financial Position, Consistency)
2. Circle Of Competence (Yes, No, Too Difficult)
3. Management (Able, Trustworthy, Ownership Oriented)
4. Economic Moat (Durable Competitive Advantage)

Peter Lynch Filters
Stocks I'd Avoid
Hot Stocks
Hot Industry
Favorable Publicity
The Next "Something"
The Whisper Stock
Before they Show a Net Profit
Companies Diworsifying through Acquisitions

The Perfect Stock
It sounds dull - or, even better, ridiculous
It does something disagreeable
It's a spinoff
Institutions don't own it; and the analyst don't follow it
The rumors abound: It's involved with toxic waste and/or the mafia
There's something depressing about it
It's a no-growth industry
It's got a niche
People have to keep buying it
It's a user of technology
The insiders are buying
The company is buying back shares

(cash - longterm debt) /  shares #
P/E less than growth rated

Philip Fisher Filters
    1.    Does the company have products or services with sufficient market potential to make possible a sizable increase in sales for at least several years?
    2.    Does the management have a determination to continue to develop products or processes that will still further increase total sales potentials when the growth potentials of currently attractive product lines have largely been exploited?
    3.    How effective are the company's research and development efforts in relation to its size?
    4.    Does the company have an above-average sales organization?
    5.    Does the company have a worthwhile profit margin?
    6.    What is the company doing to maintain or improve profit margins?
    7.    Does the company have outstanding labor and personnel relations?
    8.    Does the company have outstanding executive relations?
    9.    Does the company have depth to its management?
    10.    How good are the company's cost analysis and accounting controls?
    11.    Are there other aspects of the business, somewhat peculiar to the industry involved, which will give the investor important clues as to how outstanding the company may be in relation to its competition?
    12.    Does the company have a short-range or long-range outlook in regard to profits?
    13.    In the foreseeable future will the growth of the company require sufficient equity financing so that the larger number of shares then outstanding will largely cancel the existing stockholders' benefit from this anticipated growth?
    14.    Does the management talk freely to investors about its affairs when things are going well but "clam up" when troubles and disappointments occur?
    15.    Does the company have a management of unquestionable integrity?

Kahn Filters
High Management Ownership
No Debt
Below Book Value
Net Cash
Obscure or out of favor
Earning potential

John Templeton
Look for Bargains
Invest at the Point of Maximum Pessimism