Interested in making the most of the stock market sell-off?
Funnily enough, Owen Rask and 7Investing adviser Dr Anirban Mahanti had the same thought last month, and put together a punchy podcast episode on The Australian Investors Podcast, with their 5-part checklist for when the market falls.
Before we hit play on the checklist, it’s a good time to remember that you now have the opportunity to buy your favourite businesses at a discount to what they were last month. Consider whether anything material has changed about your view of the company (besides the sell-off).
In this video, Owen Rask & Anirban Mahanti share their 5-part checklist for researching companies to invest in when the market falls.
Without further ado, here’s Owen Rask‘s quick & easy market crash checklist (to get you started), and help you put together a watch list of companies with rock solid balance sheets.
Net Cash Position
Find companies with rock sold balance sheets, which will help save the business in a pinch. Look at cash, lower levels of long and short term debt and high retention rates.
DBNR (Dollar Based Net Retention)
How much will the company’s customers spend next year versus this year? Is the business providing mission-critical products and services that customers buy in any conditions?
Aligned Management
Are the management still providing a strong vision for the business? Are they going to make the most of the opportunity?
Controllable Costs
Look at the company’s income statement. Is it a high-quality business? Does it have good gross profit margins? Is revenue growing consistently? Are the costs under control?
Future Growth
Does the company have strong growth prospects over the next 5-10 years?
Keen to listen to a full episode jam-packed with investing wisdom from Owen Rask & Anirban Mahanti? Subscribe to The Australian Investors Podcast today!
