Brian Feroldi: Using Checklists To Find Compounders

Brian Feroldi is an investor and writer for the Motley Fool. His main interests involve the healthcare and technology industries. His goal is to buy the highest quality companies he can find, then hold on to let compounding do its thing. We spend an hour discussing his start in investing, biggest mistakes, and the checklist he uses to analyze every investment idea.

I love Brian’s systematic approach to analyzing companies. It allows investors to understand a roughly right range of company quality. It also allows you to track the quality of the business over time with hard numbers.

There’s no guessing.

The most attractive part of the strategy is Brian’s Gauntlet. The Gauntlet is a checklist that deducts points for negative attributes of a business like:

  • Wonky accounting
  • Foreign currency risk
  • Customer Concentration

I’m running the checklist on all my holdings to see how they stack up. Going forward, it’s something I’d like to add to my own investment process.

Try it for yourself and let me (and Brian) know how you like it. As Brian says in the podcast, the checklist gets better with more feedback.

I loved this conversation. I learned a ton and I know you will too.

Here’s the time-stamp:

  • [0:47] Brian’s Intro To Investing
  • [4:43] Writing For The Motley Fool
  • [6:36] Personal Finance & Investment Strategy
  • [10:45] Brian’s Biggest Losing Trade ($KMB)
  • [16:34] Creating The Stock System Checklist
  • [22:19] Look For 70s and 80s
  • [25:50] How Brian Analyzes Management
  • [29:32] Adding Glassdoor.com To Research Process
  • [32:01] Mercado Libre $MELI Checklist
  • [49:02] Running $MELI Through The Gauntlet
  • [54:05] Brian’s Favorite New Ideas
  • [58:00] Closing Questions

If you want to learn more about Brian Feroldi, check out the links below:

Let me know what you think in the comments below! Who do you want me to have on the show next?