以下摘錄我在Seeking Wisdom這本書附錄其整理的Checklist當中最重要的幾點,我認為在作任何重大之資產分配決定時必須確認的

What available alternatives do I have to achieve my goal?
- Judge alternatives in terms of goal, subject in question, rules and filters, cause and effect,
human behavior, evidence, counter evidence, simplicity and opportunity cost of money,
time, other resources, effort, understanding, risk and mental stress.
- What evidence (incl. models) do I have that these alternatives are most likely to achieve
goal?
- Are they depending on time horizon or event?
- What are the likely consequences of each action? What possible outcomes can happen?
Likelihood? How desirable is each consequence?
- Do I forego any future opportunities if I make a specific action now?

 

What are the consequences?

- Find out which alternative are most likely to achieve my goal by estimating their likely consequences 
- If I do this, what will happen? Why will this not happen? 
- What are the likely (logical) wanted and unwanted (or unintended) consequences 289 (quantitative and qualitative) and consequences of consequences (immediate and over the course of a long period) of each alternative! event (proposition) factoring in relevant variables? 
- What are the different scenarios and outcomes that can happen? What is likely to happen short and long-term based on the evidence? 
- What can help me make predictions on consequences or if something is likely to be true or false? - What must happen for the goal to be achieved? How likely is it that the necessary events will happen and happen to me? What does the probabilities favor? What will happen if! reverse the proposition? 
- What are the uncertainties that can significantly influence the outcome? What unintended consequences are there due to repeating effects, complications ... ? Is the net effect positive? Does the consequences predict anything else? What else does this mean? 
- What are the consequences if this is true or false? 
- Have I considered the whole system from different viewpoints? Have I considered social, financial, physical and emotional consequences? What are others likely to do? What are my experiences of earlier behavior? What happens when others do the same? 
 
- What is the track record (case rate, base rate frequency, variability, average rate, degree of randomness, my own experiences, environment, players, and other relevant factors for the case) on what happened (worked and not) in the past? Is there any reason to believe that this record isn't representative for what is likely to happen in the future? What can make the future a lot different than the past? What's been permanent and what hasn't?
- How long can this continue? What is the major cause(s) now? What force(s) can make it continue, initiate a change, or stop it and why? Is it likely?
 

Disprove my (or others) conclusion by thinking like a prosecutor 

- Consider causes for misjudgments 
- How can I test and prove that my idea and conclusion is wrong? What reasons are there why I might be wrong? Where can I find the evidence that suggest I am wrong? How credible is my evidence? What facts and evidence disagree with my conclusion/idea? 
- What major assumptions have I built the case on? Are they built on reality? Are their consequences logical? Has anyone proved that my assumptions are right? What are the consequences if my beliefs and assumptions are wrong? 
- What have I ignored or overlooked? Better alternatives? Have I ignored evidence? Have I taken into account the limitations when humans are involved? What factors are uncertain and why? Have I just projected present trends? What have I misinterpreted? Have I used the right definitions? Did I consider and combined all the relevant factors? Have I used the appropriate measure/yardstick? Did I go wrong in the measurement? Have I confused cause and correlation? What about if my goal is shaped by what I believe is true but it isn't? Are there random or systematic errors? What other causes can explain my results? Have I considered the whole system and that interacting parts sometimes can vary in unexpected and unwanted ways? 
- Bias for my own ideas? Is my ego getting in the way of making an intelligent decision? Will I really beat the historical average/record? Have I looked for contrary effects? 
- What do I not see? What is the significance of this? Does an inversion of the assumption lead to a logical absurdity? Is the opposite more likely? Is there any contrary evidence? What evidence can prove it is false (or not achieving goal)? What experimental (or experience, observation ... ) evidence are there that it's false? More evidence in favor of that? What causes it to be false? 
- Meaning? Can I show that the consequences of it being true are unbelievable? What is the implied effect if! trace it out mathematically? Would the opposite of the statement be more likely? If yes, the proposition is probably false.
 

What is the downside? 

- How can I be hurt? What could possible go wrong? What can turn this into a mistake? What would the consequences be? 
- How often do things go wrong? Surprise factors? What can happen that will dramatically change the outcome? 
- What is the worst thing that could happen - the nightmare scenario? How likely is that? What will I do if it does? What are the consequences if things go from bad to worse? And what are then the consequences? 
- What are the consequences if! get two or three forces acting in concert against me? Which alternatives net effects are least worse? - Execution risk? - What do I least like? What am I least sure of? 
- Can an advantage give me unwanted consequences? How do I lose an advantage? 
- How can I structure the "system" to minimize the influence of negatives? Antidotes to what I don't want happen? Do I have a backup plan for surprises? Can I correct it? What rules can I install to achieve goal and avoid non-goal? Is there a built-in safety factor? 
 
What are the consequences if I am wrong? 
 
- What key thing am I betting on? Do I risk what is important for me for something of relative low utility for me? 
- What is the cost (dollars, time, mental stress etc) of being wrong weighted against the benefit or value of being right compared to the next best available opportunity? 
- If I do this because I believe the consequences are in my best interest/it's true but I turn out wrong/it is false, what are the short- and long-term consequences (actual loss and opportunity cost loss) for my goal and can I handle them and/or reverse them? 
- If I don't do this because I believe the consequences is not in my best interest/it's false but I turn out wrong/it's true, what are the short- and long-term consequences for my goal and can I handle them and/or reverse them? 
- If I don't take a decision at all now because I don't believe it is necessary but I am wrong, what are the short-and long-term consequences for my goal and can I handle them and/or reverse them? 
 
What is the value? 
 
- What is the utility or preference of each of these alternatives to me? Which alternative is most likely to achieve my goal and ultimate objective? Is it really more attractive than the other choices I have? 
- What can I use as criteria to judge my alternatives against each other? 
- What do I like best if I weigh the alternatives against each other by assigning their characteristics numerical values? 
- Will it make a difference? Make an impact? How willing am I to accept certain outcomes? 
 
What yardstick can be used to measure progress or to measure things against? 
 
- What yardstick(s) do I use? What is the yardstick by which the decision is made? 
- How can I easily measure to what degree my goal are being achieved? What indicators can I track? 
- Does the "system" give people an incentive to behave in a way so that my goal will be achieved? Or does it work against the goal? 

 

- Have I installed some kind of control stations and rules? Why is this the right rule? What are the consequences if I don't install this rule (or change my way of doing something)? What administrative and practical actions must I do due to the rule? How much time will it take to follow the rule? Can I control how I follow the rule? Can I install a time-limited rule? Where does the rules not work? 

 

- Is another decision contingent on a specific event happening? Have I evaluated the issue as it exists today? Is the underlying rationale for the decision still there? What new evidence is there that can change the likelihood? Does my way of measuring progress give any clue of what is likely to happen in the future? Events - relevant or irrelevant? Does it make any difference for my goal (independent of time horizon)? 

Post mortem or learning from mistakes 

- How well did it or didn't it work out? Did I act? Did I do what I said? What did I think at the time? Original reasons compared to reality? 
- Why did I go wrong? How? Where? Opportunity cost? 
- How can I figure out if this is going to continue? Have I acted on my mistakes? How act to not repeat? What should I have done and didn't do? What should I concentrate on? What must I improve? What must I learn? 
 
WHAT ARE THE LIKELY CONSEQUENCES CONSIDERING HUMAN BEHAVIOR? 
 
What is causing me to do this? 
What are my present environment and my state of mind? What is rewarding for me to do/say if I want to avoid pain? What do I perceive to be the consequences for me? Are they painful or pleasurable? What psychological tendencies will influence me? Are they likely to cause a misjudgment? 
 
What is the context? 
What does the environment and participants (incl. size) look like? Who is the decision-maker and what are his criteria for making decisions? Who benefits and who pay? Who is responsible for outcome? Who and what are influencing the participant's perception of reality? 
 
Can I judge him? 
Can I judge his character? What are his experiences? What temporary or permanent characteristics influence him (age, cultural background, health, mood ... )? What environmental (present internal and external) or situational factors influence him? Does he want to sell me something? What is in his self-interest to do? What is logical for him to do? What is rewarding for him to do ifhe want to avoid pain? What does he perceive as painful? What does he fear and why? What does he want more of or what does he not want to be taken away? What "resources" motivates him? His health, job, family, position, reputation, status, power? What would give him an incentive or disincentive? What reward or penalty system causes his behavior? What is he rewarded (perceived) for doing? What is he punished (perceived) for doing? How is he measured? How does he perceive the consequences of non-goal? Is it to his advantage/interest to believe (or not to believe) something? 
 
What are the psychological tendencies and shortcuts that influence him and can cause misjudgment? 
What bias affects his conclusions? What external influences is there, that will likely influence him? What temptations are there that appeal to his self-interest? What activates his behavior? 
 
What are the consequences? 
What are the consequences for me? Will my goal still be achieved? Is what is rewarding for him also rewarding for me? Is the system set up so that the relevant participant's interest coincides with my goal? Does it "pay him" to make the wrong decision? Does he understand the consequences of his behavior? What are the short-and long-term consequences for him? What are the lines of responsibility? Does he have the responsibility for the consequences? What happens when others do the same?
 
BUSINESS EVALUATION 
Filter 1 - Can I understand the business - predictability? 
- Reasons for demand - How certain am I that (and can explain why) people are likely to continue buy this type of product or service in the future? What has happened in the past and what is likely to happen in the future? Cyclically in demand? Capacity versus demand? 
- Return characteristics - Industry and company return characteristics and change over the last ten years? 
- Industry structure - No of competitors and size? Who dictate the terms in this industry? What is needed to make money in this industry? Position within the industry? Do I know who is going to make the money in this market and why? 
- Real Customer - Who decides what to buy and what are his decision-criteria? 
 
Filter 2 - Does it look like the business has some kind of sustainable competitive advantage? 
- Competitive Advantage - How certain am I that (and can explain why) they are likely to buy the product or service from the company rather than from someone else? Are the reasons virtually unchanged from what they were ten years ago? Are these motivations likely to be unchanged over the next ten years? 
- Value - How strong and sustainable is this advantage? Have the advantages become stronger and more durable over the years? What can destroy or reduce them? Barriers to entry? Brand loyalty? Vulnerable to change in demand or prices? Easy to copy? Short product life cycle? Customer cost and incentive to switch supplier? Annual cost differential against competition? Capital investments needed? Bargaining power? Obsolescence risk? New customer alternatives? Change in buying habits or power? Competitor potential to undercut prices assuming same cost structure? What is needed to make sure the advantages stay sustainable? Growth opportunities left? Is the demand for the product likely to grow? Untapped unit volume demand? Pricing power?
- Profitability - Can the advantage be translated into profitability and why? How does the company make money? How much capital is needed to produce incremental revenues? Financial characteristics - return on capital (operating margins and capital turnover), gross margins, sales growth, cost- and capital structure and efficiency? Normalized free cash flow? Advantages of scale? Critical variable?
 
Filter 3 - Able and honest management?
- Is the management composed of competent and honest people that understands and focuses on creation of value?
 
Filter 4 - Is the price right?
- Can I buy at a price that provides a good return with a huge margin of safety measured against other available alternatives and with evidence from facts and figures?
 
Filter 5 - Disprove
- How can the business get killed? If the company could kill one of its competitors, who would it be and why? If the company would go away for 5 years which competitor would they bet on and why? How resistant is the business to adversity? Assume the company paid out all its equity capital, would it still have any value? Could someone with the access to billions of dollars and talent, successfully compete with the company? How much damage could a competitor do if he doesn't care about returns? Recession sensitivity? Execution risk? Will new technology help or hurt?
 
Filter 6 - What are the consequences if I'm wrong?
 
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