InvestED: The Rule #1 Investing Podcast cover image

InvestED: The Rule #1 Investing Podcast

428- FROM THE VAULT: Bill Ackman’s Investing Checklist Part 1

Jul 25, 2023
Bill Ackman, an invaluable source of learning for aspiring investors, shares his investing checklist which includes simplicity, predictability, dominant market position, limited risk exposure, free cash flow generation, barriers to entry, excellent management, high return on capital, and a strong balance sheet. The hosts discuss their recent trip and recommend staying focused when broadening investing practice. They explore the impact of extrinsic risks, generating cash flow, and barriers to entry. They emphasize the importance of understanding a business's moat and reasons not to invest.
28:18

Episode guests

Bill Ackman

Podcast summary created with Snipd AI

Quick takeaways

  • Invest in simple and predictable businesses with a dominant market position and limited exposure to risks.
  • Identify businesses with large barriers to entry, such as brand reputation or pricing power, to ensure a strong competitive advantage.

Deep dives

Bill Ackman's Checklist for Investing

Bill Ackman, a renowned investor, shares his checklist for investing in this podcast episode. The checklist consists of eight principles: a simple and predictable business, a dominant market position, limited exposure to external risks, free cash flow generation, large barriers to entry, excellent management and good governance, high return on capital, and a strong balance sheet that doesn't require outside capital. Ackman emphasizes the importance of understanding the business and its moat, which includes factors like brand reputation, secrets, and switching barriers. He also highlights the significance of excellent management, high return on capital, and a strong balance sheet. Ackman's checklist serves as a guide for finding high-quality investment opportunities.

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