The Investment Checklist: The Art of In-Depth Research

Reviewed on , book by Michael Shearn

This review is biased by two facts: I know Shearn, and this is the first book I’ve read about investing, which is an interesting topic to me. The conversations I had with Shearn in person a couple of weeks ago and hearing his approach to investing, opened a different perspective on what investing can be like—this is what prompted me to read the book.

The checklist approach that the book follows is great. It goes through the important factors that go into making an investment decision, and investing for the long-term. This is not investing in the short-term for maximum profit, but investing in businesses that will deliver over the long-term. It’d be an interesting world where every investor was thinking as long-term as Shearn, highlighting such terms as conscious capitalism promoted by John Mackey.

What fascinates me about the book, is the amount of emphasis it puts on management of the company. A stat that really jumped out at me, is that of the Fortune 500 companies 28 of the CEOs have a 10+ year tenure. Of those, 25 of the companies outperform the S&P 500. The macro-lessons on what good management looks like to an investor, is an interesting lesson. Applying this inward to my own employer, it’s interesting to see what everything looks like from an investors point of view. At the end of the day, my tenure is also a sort of investment to be evaluated with the same checklist.

Something that’s clearly been paid attention to is the amount of examples. Every idea and point has many examples of this in practise, whether it’s good or bad. It’s clear it’s coming from someone who’s done their homework for the book.

What fascinates me about investing, even if it’s not something I’m pursuing (index funds do it for me) is the amount of care and thought that goes into their decision-making. This book is a fantastic example of the rigorous process: Supplier relationships, reading years of 10Ks and financial statements, understanding the management team and their motivations, understanding employee engagement, ..