Lead magnet · free · educational purpose

StonkScout checklist:
12 questions before you invest in a stock.

Before putting money into a company, answer these twelve questions. They do not tell you what to buy: they show you what to look at, what to check and where the risk is. Print them, tick them and use them with any stock.

See the 12 questions

This is not financial advice. It does not guarantee results. Investing involves risk of loss, including total loss.

A · The business

If you cannot explain how a company makes money, you have not invested yet: you have bet.

How does this company make money, in one sentence?
Write it in your own words. If you cannot, the company is not ready for you.
Does its competitive advantage survive 10 years?
Brand, cost, network, regulation, contracts. An advantage anyone can copy is not an advantage.
Who is the customer and why do they not switch to a competitor?
High switching cost = loyal customer. Pure commodity = price war.
Who is really in charge? Do the team's interests match the shareholder's?
Check board pay, ownership and recurring dilution. Red flag: paying in shares whenever they can.

B · The numbers

Numbers do not lie; presentations can dress them up.

Is it growing on quality or on effort?
Organic growth with stable margins = quality. Growing because it buys companies or cuts prices = watch out.
Does it generate real cash or only accounting profit?
Free cash flow versus profit. If cash does not follow profit, ask why.
How much debt does it have and can it repay it without issuing shares?
High debt + falling sales = dilution or worse. Red flag: buybacks or borrowing that exceed the cash generated.
Are the margins sustainable or a lucky accident?
Compare 5-10 years. One good year is luck; a good decade is a business model.

C · The price

A great company at an absurd price is a bad investment.

What expectations are already priced in?
High P/E = demanding growth. If the market expects 30% a year and it delivers 15%, the price falls even if it makes money.
Can I explain what would have to happen for this price to be a good one?
Write the scenario down. If it only works in the best case, it is a hope, not a thesis.

D · The risk

The question that separates research from gambling.

What is the worst that could happen, and could I stomach it?
Regulation, technological substitution, demand, a cycle turn. Write down the reasonable worst case before buying.
What new information would invalidate my thesis?
Define the red line in advance. If you do not know what would make you sell, you are not investing: you are waiting.

Educational purpose and risk warning

This checklist is general learning material. It is not personalised financial advice, nor a buy or sell recommendation, and it does not take your situation, assets or risk tolerance into account.

Investing in securities involves risk of loss, including total loss of capital. Past returns do not guarantee future results. Always check this information against primary sources and, where relevant, with a qualified professional.

The label «educational» does not exclude any obligations that may apply to public investment recommendations.