Copy of David Gardner's 25-Question Risk Framework

	A	B	C	D
1	Questions	Yes or No	Points	Notes
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3	1. Was the company profitable over the last quarter & the last 12 months?
4	2. Was the company free cash flow positive over the last quarter & the last 12 months?
5	3. Does the company rely on recognizable branding that is truly valued by its user base?
6	4. Has the company diversified its buyer base so that no single customer accounts for more than 20% of its revenue?
7	5. Does the company receive positive word of mouth from its customers?
8	6. Did the company grow its sales by 10-40% annualized over the past 3 years?
9	7. Can the company operate its business in the next 3 years without external funding?
10	8. Does the company maintain a high standard of disclosure consistent with SEC guidelines in the U.S.?
11	9. Would an intermediate-level investor find the financial statements & management ownership disclosures easy to understand?
12	10. Did the company report R.O.E. (Return on equity) of 15% or higher over the last year?
13	11. Is the company free of any direct competitors that possess substantially greater financial resources?
14	12. Is the company free of any disruptive upstarts that are visibly challenging its business model?
15	13. Would potential new competitors face high economic, technological, or regulatory barriers to compete with this company?
16	14. Does the company have a market cap of $10 billion or more?
17	15. Does the stock have a beta of 1.3 or less?
18	16. Does the stock have a positive price-to-earnings multiple (PE ratio) less than 30?
19	17. Do any of the founders own at least 5% of the company?
20	18. Do the top 3 officers have more than 15 years of combined leadership at the company?
21	19. Does this company meet the majority of the Rule Breaker attributes?
22	20. Is the company easily able to withstand binary outcomes?
23	21. Is this company fault-free & fraud-free in all its corporate statements & deeds?	No	1
24	22. Do you want to know more about this company? Are you willing to dig deeper?
25	23. & 24. Create 2 insightful questions specific to the company you are rating?
26	23. & 24. Create 2 insightful questions specific to the company you are rating?
27	25. Can you be certain that the company is invulnerable to external world or macroeconomic events such that you’re sure you can get all of your capital back?	No	1
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29	Total Score		2
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