How do you Pitch a stock idea like a hedge fund manager... easy! fill the blanks

How do you Pitch an idea for a stock like a hedge fund manager?
easy! fill the blanks

I want to thank Phil Town for the original idea, he calls this the Rules Story form.
I appreciate a lot the clarity that it brings to presenting an idea.
Is amazing how people that have never presented an idea, can clarify a couple of definitions, and put their thoughts.
I also suggest going through a checklist to clarify your ideas before filling the form and presenting the idea, if you are still not using checklists I suggest reading the checklist manifesto, Im sure youll find there nothing like a checklist to make you rethink any idea you felt sure about.

I learned from a book called The Back of the Napkin to define a "problem" with the typical questions like: Who? What? How many? Where? When? How? Why?

So fill in the blanks! Enjoy!

Investment idea
Who? What? How many? Where? When? How? Why?

WHAT?:

STOCK SYMBOL: CURRENT STOCK PRICE: $
COMPANY NAME:

What does it do?

This company is in the industry.


Competitors: Market Cap	Competitors: Rule One Score	Competitors: Management Score	Company Ranking By:	Rank
			Market Cap:
			Rule One Score:
			Management Score:

In the next ten years, I believe this industry will: grow shrink stay the same.

This is a(n)
easy
hard
too-hard industry for me to understand because:

I think this company is good for the world because:

Summary of Understanding: (The top three reasons to own this company for at least the next ten years)

MOAT: (Intrinsic characteristic(s) that makes this company difficult to compete with):
This company has Brand, Price, Secrets, Toll, Switching moat(s).

The main advantage(s) this company has over its competitors is
(characteristic).

This is a durable competitive advantage because:
.

Historical Growth Rate numbers DO DO NOT help confirm the company has a good moat. Rule #1Moat Score: .
Historical Average growth rates (of all four historic periods – 10yr, 7yr, 5yr, 3yr):

Description	Average Growth Rate
Book Value Per Share (BVPS)+Dividend Growth Rate	%
Earnings Per Share (EPS) Growth Rate	%
Operating Cash Per Share (OCPS) Growth Rate	%
Sales Growth Rate	%

Based on these averages, what overall Future Growth Rate (FGR) would you project for this company? %.
If Growth Rate Numbers DO NOT confirm Moat, is this because of short-term problems the last year(s)?
Yes No

WHERE?:

I found this company in my 4 Circles in the:
Talents
Passion
Does the world need this
Money circle

OTHER Ways I found this company:

WHO?:

MANAGEMENT:

The CEO is a: founder, serious owner, long-time CEO recent CEO.

He She does does-not have a Big Audacious Goal

The CEO's letter does, does-not help tell me what I need to know to value the stock.

I trust him/her with my retirement money because: _____________

Rule 1 Management Score   increasing, decreasing no change
ROE     increasing, decreasing no change
ROIC     increasing, decreasing no change
Debt (in years of earnings)    increasing, decreasing no change

The above confirm the CEO is doing a good job: Yes No

His pay and options are excessive? what are his/her motivations?

HOW MANY?

Are there any other value investors buying it?

	Investor	% of portfolio invested	Average price paid per share
1
2
3

Are there substantial put or calls float?

WHY?

Problems:

The solutions are:

The company has has-not solved these problems.

VALUATION METHODS:
CURRENT PRICE PER SHARE $

1) Earnings Power Value (multiplied by 10):

EPS TTM (Earnings Per Share/Trailing Twelve Months):	$
Future Growth Rate (from calculator) or your own Estimated FGR	%
Future EPS in ten years	$
Estimated Future P/E Ratio in five to ten years
Future Value in ten years	$
Minimum Acceptable Rate of Return (MARR) per year:	%
Sticker Price	$
MARGIN OF SAFETY PRICE	$

2) PAYBACK TIME (PBT) ANALYSIS:

FCF (Free Cash Flow) Per Share	$
FCF Ratio %	%
Current Price FCF Payback Time	Yrs.
FCF EIGHT YEAR PAYBACK TIME PRICE	$

3) Earnings Power Value * Ten Cap Rate:

INCOME STATEMENT:
Pre-Tax Income

CASH FLOW STATEMENT:	$
Plus Depreciation and Amortization
Plus/Minus Accounts Receivable
Plus/Minus Accounts Payable
Minus Maintenance Capital Expenditures

Total = Owner Earnings
STOCK AT A GLANCE:
Divide by Shares
Owner Earnings Per Share
TEN CAP VALUATION PRICE (OE x 10):

BASED ON THE VALUATION METHODS - IS THIS COMPANY ON SALE?
Yes No Close (within 20%)

STORY INVERSION

Some think my top three reasons (above) to own this business are wrong. Here is the inversion of each reason:

1.

2.

3.

INVERSION REBUTTAL:

However, I disagree with the above inversions. Here are my rebuttals for each inversion:

1.

2.

3.

EVENT

If this business is on sale, is there an Event?
Yes No

If so, describe the Event:

If not, is Mr. Market wrong about the price (high or low) or is it selling at sticker price (fair value)?

Will this Event be resolved successfully within 3 years or less? Yes No

Explain why or why not:

CONCLUSION (circle one): BUY WATCHLIST TOO HARD NOT WONDERFUL

Explain:

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