Disclaimer: I am not a financial advisor and this is not investment advice.

I have made every possible mistake in the book when it comes to stock investing and in fact I still learn something new everytime I invest in a stock. So I thought I am creating my own set of rules purely for myself so that I can read, refine and repeat it from time to time as I learn new things. Most importantly, I want to have my own tried and tested framework for investing where my decisions are data/value driven and not out of emotion, speculation or FOMO.

My plan is to refer to these stock investing questions/rules aka cheat-sheet before any investment. Specifically, I want to call myself out if I am going against my own principles before any investment.

So let’s get down to business and here are some of the questions to ask before buying any stock according to me:

1. Do I understand what the company does?
2. Do I know if the Founder/CEO is a relentless executor?
3. Is the company solving a hard and a unique problem and does it add value to your life?
4. Do I use and love the product of the company or do I know others who are deeply and madly in love with its product?
5. How difficult is it for the incumbents to buy/replace this company/product? This answer depends a lot upon the founder/CEOs execution and long-term vision.
6. Will the company be still there after 10 years?
7. Is it already or can it become a monopoly in 10 years?
8. Can I hold the stock of this company for the next 10 years and ignore all the charts/volatility?
9. How difficult is it to get hired by this company? In my case this is applicable because I am a Software Engineer and I mostly invest in tech stocks. And the best way to find this is to go and interview with the company.
10. In these 10 years, can the company grow by 10x aka can they create a completely new market to dominate? For e.g, can a 100B dollar company become a Trillion dollar company in market cap or can a trillion dollar company become a two trillion dollar company?
11. Am I buying at the peak of the market?
12. Am I buying at an all-time high of this stock?
13. If the stock has already fallen significantly from it’s all-time high then how low can it go?
14. What is the true value of the stock and at what price am I willing to buy?
15. Have I set up the LIMIT trigger for the price I am willing to pay? In other words I don’t want to manually buy the stock out of the blue or emotion/FOMO but instead use the machine to find and catch the dip at which I am willing to invest.

Regardless of whether you agree with my principles or not, I just want to say don’t get greedy or blind in FOMO, read some books on how to value companies/stocks, invest if you understand what you are buying and at what price you are buying, invest only the money you own and what you can afford to lose.